Health Bill Moves Forward with Excise Tax Compromise

January 15, 2010

Health Bill Moves Forward with Excise Tax Compromise
Yesterday, White House officials, leaders in Congress and labor unions reached agreement on a proposal to limit the excise tax on higher-cost health insurance plans - a sticking point that had been a major obstacle to merging the House and Senate health care reform bills.  Health plans derived from collective bargaining (union employees' plans) would be exempt from the tax until 2018, instead of beginning in 2013, as had been the design.  The agreement is said to raise the threshold at which other working family plans are taxed from $23,000 to $24,000 in 2013, with annual increases to reflect the Consumer Price Index.  For individuals, the threshold will rise from $8,500 to $8,900.  Specific provisions were made to raise the threshold for plans with retirees age 55 and up, as well as plans that have a significant number of older workers.  Also, beginning in 2015, the cost of dental and vision care would be barred from the calculations.  Alliance President  said yesterday,