Health Care Reform: Should we tax current health benefits?

By WEAC ESP Organizer Kim Wiemer Noyce (courtesy of the Health Care Reform Workgroup)

As part of health care reform, Congress is considering taxing individuals with health benefits with premiums costing more than the threshold determined by Congress. Many ESP members have bargained to maintain their quality health benefits, some at the cost of wages.

If an excise tax was imposed, what impact would that have on your household finances?

It's clear to us that the excise tax would have severe, unintended consequences. It would harm our members by taxing higher-cost health care plans.

An excise tax will not control health care costs and would cause workers to lose health benefits without compensatory salary increases. Our negotiations experience tells us that benefits would be cut if the tax proposal became law.

The excise tax will hit retirees hard since those between the ages of 55 and 65 typically have higher health care costs (30 to 80 percent higher than average). For ESP members who are already struggling to earn a living wage, this is yet another setback.

You have negotiated health care plans at the expense of salary gains, and we have to let our lawmakers know that there are better ways to pay for health care reform.

What is the union doing about the possibility of an excise tax?

Last week, WEAC leaders joined forces with the NEA and other state affiliates to deliver a message to lawmakers urging them to eliminate the excise tax currently in the Senate's health care reform bill, the Patient Protection and Affordable Care Act. (Click here to see the letter the NEA sent to lawmakers.)

The NEA delivered a message to lawmakers saying, "The NEA stands solidly on comprehensive health care reform, but we also stand firmly opposed to the proposed excise tax on higher-cost health plans. While we understand the challenge of finding sufficient revenue to pay for this needed legislation, we know there are other ways to finance the cost of quality, affordable health care for all Americans."

And we're not alone in sounding the alarm of taxing the health care of hard-working people. As you can see in this Associated Press story, the AFL-CIO and the Teamsters are joining the NEA in urging Congress to drop the excise tax.

What can I do about this possible excise tax that could harm me and my family?

Contact your legislator! Tell them how you would be affected. Let your voice be heard. You elected them into office. They should want to listen to you as a voter.

WEAC leaders and staff are urged to contact Senators Kohl and Feingold and their representative in the House to deliver a personal message. Follow this link to find contact information for your members of Congress and to join an NEA petition against the excise tax. Tell your elected officials that:

• We're in favor of health care reform, but the struggling working class should not have to foot the bill. 
• Tax the millionaires, not the bus drivers and teachers. An excise tax would be devastating for educators. The poor economy is already taking its toll on educators and job losses are mounting. The excise tax would penalize people who have the quality health care that all Americans should be afforded. 
• We believe there are alternatives to the excise tax.

What's the timeline? The NEA is closely analyzing each amendment on the Senate's Patient Protection and Affordable Care Act. This week will be full of debate with lawmakers hoping to take this forward for a floor vote early next week (week of December 20).

WEAC will continue to monitor developments on this and will issue updates and alerts as needed. If you have questions or would like to share your story, please post a comment or e-mail WEAC ESP Coordinator, Kim Wiemer Noyce.

Stay tuned for more information on www.weac.org/healthcare.