Health Care Reform Plan Excise Tax Gets Little Support From Employers

By Staff Report

Sep. 24, 2009

Few employers would support including a provision in health care reform legislation to tax insurers that provide costly health insurance plans as a way to generate revenue needed to expand access to health care coverage, according to a survey released Thursday, September 24.

The Watson Wyatt Worldwide survey of 160 employers found that just under 20 percent of respondents would support such a tax, which is part of health care reform legislation being considered by the Senate Finance Committee.

Under that measure, starting in 2013 a 40 percent excise tax would be imposed on employer-provided health insurance coverage on that portion of a premium exceeding $8,000 a year for single coverage and $21,000 for family coverage.

The threshold for triggering the tax would be set somewhat higher for employees working in certain high-risk industries, such as law enforcement and mining. The tax would be paid by insurers and third-party claims administrators in the case of self-funded plans, but experts say those parties would try to recover those extra costs from employers.

There is even less support to include the cost of employer-paid health insurance premiums as income to employees as a means to generate revenue to expand access.

Just 11 percent of respondents support such a change in tax law. There has been little congressional interest as well.

Meanwhile, 73 percent of respondents said health care costs are likely to increase either somewhat or significantly if Congress approves health care reform legislation. Sixty-eight percent said that if reform legislation is passed, it will weaken the role employers play in providing coverage, and 18 percent said the enactment of reform legislation would greatly weaken the employer role.

“Both Congress and the White House have said repeatedly that health care reform should build on the employer-sponsored system. However, most employers are apprehensive that the outcome will be quite different,” said Ted Nussbaum, director of group and health care consulting at Watson Wyatt in Stamford, Connecticut, in a statement.

A summary of the survey is available at

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

What’s New at

blog workforce

Come see what we’re building in the world of predictive employee scheduling, superior labor insights and next-gen employee apps. We’re on a mission to automate workforce management for hourly employees and bring productivity, optimization and engagement to the frontline.

Book a call
See the software

Related Articles

workforce blog


What is Earned Wage Access (EWA)? A Few Considerations

Summary Earned wage access (EWA) programs are an increasingly popular way for employees to access their...

benefits, earned wage access products, payroll, time and attendance

workforce blog


EEOC says that employers legally can offer incentives to employees to get vaccinated in almost all instances

If you’re an employer looking to get as many of your employees vaccinated as possible, you can rest eas...

ADA, CDC, COVID-19, EEOC, GINA, pandemic, vaccinated

workforce blog


Fixing some common misconceptions about HIPAA

Ever since the CDC amended its COVID-19 guidance to say that the fully vaccinated no longer need to wea...

COVID-19, health care, HIPAA, human resources, wellness