November 13, 2012
Authored by: Chris Rylands
Now that the election dust has settled, much of the news is about the looming fiscal cliff (as discussed on our sister blog, TrustBryanCave.com). As most of us recall, this is not a new issue, but one that our elected leaders have created for us. (This Forbes op-ed has a pretty good explanation, including mentioning the tax increases we’ve blogged about previously.)
In 2010, the National Commission on Fiscal Responsibility (commonly known as the Simpson-Bowles Commission) issued its report on how to solve the fiscal crisis. Among the features of its comprehensive plan were 2 benefits related items. Given that a combination of a lame duck Congress and a second term President are likely to address the fiscal cliff in some fashion, it is worth revisiting the report and these two items, as they will probably factor in the discussion.
One benefits item was capping the tax exclusion for employer-provided health insurance at 75% of the 2014 cost until 2018, with a gradual phase out of the cap lasting until 2038. (The report also suggests reducing the PPACA “Cadillac Tax” from 40% down to 12%.) While capping the tax exclusion for health insurance (the largest of the so-called “expenditures”) would be unpopular, our guess is that it would probably not have a great impact on the availability of employer-provided insurance. The availability of the health care reform