Taxing Employer Benefits. About Time ...

[Franz Kafka]

Kafka: No, just trying to shake the foundation of the entitlement society.

Yes, I see that. I think this is what post-communist Russia is trying to do right now - that of encouraging free market enterprise by taxing everyone equally across the board (and that % is much lower than what we pay).

Republicans are for corporate socialism (what you're against).

Liberal democrats are for federal socialism (what we're all against).

Libertarians are for pure free market enterprise (too idealistic although I'm Libertarian).

Socialist Libertarians (term I made up) are for free market enterprise by equal taxation.

JMO

 

[djs]

Yes, insurance has an unlimited supply (sort of, there are limits), but the product the insure for does not, meaning rates ARE impacted.

I have no idea what you mean by HSA consumers would create pricing competition. You'll have to explain the logic of that to me. Do you simply mean consumers will ask the cost of the service? Perhaps shop the service? This doesn't necessarily mean lower prices.

Employers are dropping healthcare because of prices. I think its erroneous to think most aren't hiring due to the price of health insurance though, they simply wouldn't offer it. Soft product demand in the marketplace (i.e., hiring doesn't mean more profit) is the true culprit here.

But group agents lose what IM agents win. Now, I don't care, I'll write the person either way, but, again, you are simply moving money around and worrying about your pocket, not whats best for everyone. That's okay, but just admit it to yourself.

Dan

P.S. most individuals tend to prefer a group plan to an individual plan. Why is that? Okay, number 1 reason is they don't pay the premium (at least partly) and number 2 is most group plans are more feature rich. People still like group coverage better.

 

[669comche]

America is struggling on the international stage without a doubt because of the healthcare costs. Add to that that we actually don't produce anything anymore and spend more dollars importing than exporting.....US business is suffering BAD...group health insurance is just part of the problem.

I agree that many Americans feel "entitled" to group insurance if they go to work for a company.

The only real way to make the insurance system work is to require everyone to carry it. Group insurance cannot accomplish this.

Get rid of group.........and make it a level playing field for all......

 

[somarco]

It's no longer an investment into the employees when the new law requires benefits to be offered or force the employer to pay a fine.

I think you are simply viewing things through the eyes of a person who would see their business vanish if the employer health system was de-linked, not from the standpoint of your average person. In theory, a competitive marketplace would require a raise in salary to offset the value loss of a group health plan.

Several large companies have already done studies showing how much they can save, and drive to bottom line profits, if they pay the fine. It is a scary sight, especially to the idiots in DC who think they rule the private sector.

ABC and I agree on more things than we disagree on, but his comments on group health insurance are on target. I back his comments 100% and my market is not primarily group health.

That being said, I have extensive experience in the jumbo group health market all the way down to the 2 life mini groups. Yagent and others would do well to listen to him.

If employers jettison health insurance and give employees a raise the raise will not be anywhere close to what they were paying before for health insurance.

Pick a number. Say the employer is paying $800/mo for health insurance and the fine is $200. If the employer gives a $600 raise it costs them more than $600.

The fine is not tax deductible, so no write off there. That will mean they have to cut the $600 "savings" a bit.

The $600 is payroll, subject to FICA, SUTA, FUTA and WC. Those figures add about 20% to the cost so now you have to reduce the $600 gross pay increase to about $450 to hold the line for the employer. Factor in the increased taxes from paying the fine and the gross increase in pay to the employee in this example might be $400 tops.

So the employee loses a benefit valued at $800 and gets a $400 increase in pay (tops) which is about $300 after tax.

And they get to go into the Exchange and buy a plan that costs more than they had withheld from their paycheck before.

Everyone loses under Obamacrap, not just ABC or anyone else who earns a living selling health insurance.

Get rid of group.........and make it a level playing field for all......

That won't accomplish what you want.

Wages are so much higher here than almost everywhere else, at least where the jobs are going, it takes more than just canning the group health.

American workers won't work for less than $15/hour and they expect to compete with folks in Sri Lanka who are willing to work for $0.50 an hour to produce $12 shirts for Wal-Mart.

 

[Yagents]

Yes, insurance has an unlimited supply (sort of, there are limits), but the product the insure for does not, meaning rates ARE impacted.

I have no idea what you mean by HSA consumers would create pricing competition. You'll have to explain the logic of that to me. Do you simply mean consumers will ask the cost of the service? Perhaps shop the service? This doesn't necessarily mean lower prices.

and number 2 is most group plans are more feature rich. People still like group coverage better.

Yes, HSA consumers shopping will lower prices. See the other thread, but price transparency would have to be required and robust to make it happen. Try to name me one other product/service that is not under the gun from the consumer to increase quality for less money !!

lower the cost of medical, you lower the cost of premiums

Yes, group covers more, but not everyone needs a cadillac plan.

Always sold HSA's, it wins in best case and worst case scenario over past 7 yrs. Healthy clients? Saved money in premium and tax deductions with savings acct. Seriously Unhealthy? you can't beat the DEFINED out of pocket maximum that an HSA plan brings. Copay plans always lose in worst case scenario. It's a toss up if the expense is a medium cost amount, but that's not why they own "insurance"

 

[dgoldenz]

I understand exactly what both you and ABC are saying, but there is still no reason for some employees to get a benefit that others don't simply because of the way the group plan is structured. There are still plenty of employees that would give up their $1200/month health insurance benefit for a $700/month raise in their paycheck.

It would also be easy enough to set up an alternate HSA-type plan where employers can contribute to an account which exempts them from FICA taxes on the amount contributed, saving the employer money on wages, while still allowing the employee the freedom to buy their own plan. I have gotten more and more families this year where a small business has stopped paying for any dependents because the business can't afford it and they can't afford the family rate, but would lose out on the employer contribution altogether if they opt out. That scenario will only increase as rates continue to go through the roof and the economy still stinks.

 

[somarco]

set up an alternate HSA-type plan where employers can contribute to an account which exempts them from FICA taxes

I believe you are thinking of an HRA

Yes, it can be set up, but no reason to believe the employer will. Only question is, who will blink first?

 

[dgoldenz]

I believe you are thinking of an HRA

Yes, it can be set up, but no reason to believe the employer will. Only question is, who will blink first?

Doesn't an HRA require a group health plan to be attached to it?

 

[Yagents]

I got this off the website www.coredocuments.com

Premium Reimbursement Arrangement (PRA) Plan - $299 one-time setup fee
The PRA allows employers to reimburse only health insurance premiums including group sponsored insurance plans as well as individual health insurance policies outside the group, or long-term care insurance.

 

[Full Throttle]

Doesn't an HRA require a group health plan to be attached to it?

No, I've sold a few stand alone plans.