MEDIA CONTACTS:
Nicole Vasile
Vice President, Marketing & Communications
The Council of Insurance Agents & Brokers
Nicole.Vasile@ciab.com
Jason Hammersla
Vice President, Communications
American Benefits Council
jhammersla@abcstaff.org
NEW ECONOMIC ANALYSIS UNDERSCORES IMPORTANCE OF EMPLOYER-SPONSORED HEALTHCARE TAX BENEFITS
WASHINGTON, D.C. – The Council of Insurance Agents & Brokers and the American Benefits Council today announced the release of a macroeconomic study conducted by Ernst & Young (EY), which examines the impact of the tax exclusion for employer-provided health insurance. The study validates decades of bipartisan tax policy preserving the tax treatment for employers who offer healthcare benefits to their workforce, and for employees who utilize this coverage.
“Our members have been working for decades to help their employer clients address rising healthcare costs, designing strategies that promote affordable coverage and valuable care,” said Council of Insurance Agents & Brokers President/CEO Joel Wood. “This study reinforces our long-held position that limiting tax benefits for employer-provided insurance would impact both the quality and availability of care for hundreds of millions of Americans. It also does nothing to address challenges around pricing transparency and fair market competition, which are key drivers of rising healthcare costs.”
Using a model similar to those used by the Congressional Budget Office, the Joint Committee on Taxation and the U.S. Treasury Department, EY’s analysis found that limiting the tax exclusion for employment-based health coverage to the 75th percentile of premiums would decrease U.S. economic activity, shrink the job market and lower after-tax employee compensation.
According to the study, imposing such limits on these tax benefits would result in:
- 75,000 fewer U.S. jobs each year for 10 years, growing over time to 240,000 fewer jobs annually outside of the 10-year budget window.
- A $75 billion reduction in after-tax employee compensation each year for 10 years, growing over time to $280 billion less in after-tax employee compensation annually.
- A $10 billion reduction in U.S. gross domestic product each year for 10 years, growing over time to $40 billion annually.
“This analysis confirms what voters have already clearly expressed – the current tax treatment of employer-sponsored health coverage is essential to the health and wealth of working Americans and their families,” said American Benefits Council President Katy Johnson. “The high-quality coverage provided by employers is inextricably linked to our dynamic and productive economy. We urge policymakers to focus their energies on improving value and reducing the cost of healthcare.”
Aforementioned limits to the tax exclusion would increase the uninsured rate by 1 million people each year, over the first ten years, according to EY’s analysis. Worsening health outcomes and increased mortality would result in 1,000 additional deaths each year within that same time period. The economic and health-related impacts associated with limiting the tax exclusion would intensify over time. Additional data on long-term implications and information on economic models used in the study are available in the full report.
Access the report.
Access the infographic.
About The Council of Insurance Agents & Brokers
Founded in 1913 and based in Washington, D.C., The Council of Insurance Agents & Brokers is the premier association for the top 150 regional, national and international commercial property/casualty insurance and employee benefits intermediaries worldwide. Council members are market leaders who annually place 90 percent of U.S. commercial P/C premiums and 70 percent of all employee benefits business. The Council’s Government Affairs team represents our member firms with a strong, unified voice on Capitol Hill and within the regulatory space. CouncilPAC, The Council’s political action committee, consistently maintains its position as the leading PAC in the insurance industry. In addition to providing best-in-class talent development resources through The Council Academy and publishing Leader’s Edge, an award-winning industry content platform, The Council hosts two marquis events for our membership and their carriers and strategic partners – the Insurance Leadership Forum for the commercial P/C sector and the Employee Benefits Leadership Forum for EB executives. Learn more.
About the American Benefits Council
The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council’s members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.