Health Care on the Front Burner
Health care reform is hot, both on the Federal and State agendas. Whether anything substantial comes out of these simmering pots, remains to be seen.
On the Federal level, President Bush laid out his health care proposal in his State of the Union address on January 23, 2007 (also see U.S. Treasury’s projected cost examples pursuant to Bush’s proposal).
In a nutshell, a standard deduction would be made available for health care, whether purchased through an employer, or through the individual market. The standard deduction would be $7,500 for individuals, or $15,000 for families. To the extent that the level of health care would exceed these limits, the cost would be includible in the taxpayer’s income. The tax exclusion for employer-paid premium would no longer be available.
There are many opinions on all sides of the argument as to whether this proposal would actually facilitate access to coverage for the currently uninsured.
On the State level, State Legislatures are furiously figuring out ways to propose universal health coverage, without running afoul of the ERISA preemption rules. Maryland was a bit ahead of the game by passing a health care coverage law in 2006. This law has been overturned, and thus far, the Courts are upholding the ERISA preemption to this law.
The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.
As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this Benefit Beat is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.