Consumers Want Tax-Free Insurance Premiums, Just Like Businesses
|PR Newswire Association LLC|
As Obamacare Strengthens the Individual Health Insurance Market, Tax Rules for Employer Coverage Are Still Better
U.S. Census data from 2010 indicates more than 169 million Americans, or about two-thirds of those with health insurance, are covered by employer-based health plans. Employers face different tax treatment with respect to health insurance premiums compared to Americans buying insurance on their own. Under current tax rules, employers and their workers benefit from this system. Employers deduct health insurance premium payments for workers from their income before they pay tax, and exclude these payments from their employees' taxable income.
By contrast, consumers pay with after-tax dollars when they buy health insurance on their own in the individual market. This means that a consumer in a 33 percent income tax bracket must earn
"Right now there is an uneven playing field in terms of tax-free premiums, and the American consumer is at a disadvantage," said
While those buying insurance on their own cannot take advantage of the same tax advantages businesses receive, the self-employed can treat themselves as employers by deducting health insurance premiums from taxable income if: a) they made a profit for the year, and b) the self-employed individual was not eligible to enroll in a health plan provided by a former employer, spouse's employer, or former spouse's employer. For others, privately purchased health insurance is paid with after-tax dollars except for any premium amount that exceeds 10 percent of adjusted gross income for the year.
The nationwide survey was conducted
HealthPocket.com is a free website that compares and ranks all health plans available to an individual, family, or small business, so everyone can make their best health plan decision and save on their out of pocket costs. The Company uses only objective data from government, non-profit, and private sources that carry no conditions that might restrict the site from serving as an unbiased resource. The founders of HealthPocket.com spent decades pioneering online access to health insurance information and knew they could offer something different that can positively change how people buy and use healthcare in the U.S. Learn more at www.HealthPocket.com.