Senate Republicans mull tax on employer-based health insurance
Senate Republicans set on reworking the Affordable Care Act are considering taxing employer-sponsored health insurance plans, a move that would meet stiff resistance from companies and potentially raise taxes on millions of people who get coverage on the job.
Under longstanding tax law, compensation in the form of health insurance isn’t treated as income for workers. That means employers can deduct the cost and the value isn’t subject to payroll taxes or individual income taxes. It is a system that economists say distorts the market in favor of generous insurance packages, but like other tax breaks, it has proven popular and difficult to dislodge.