The "Cadillac Tax" on Health Benefits in the United States Will Hit the Middle Class Hardest: Refuting the Myth That Health Benefit Tax Subsidies Are Regressive.

U.S. employment-based health benefits are exempt from income and payroll taxes, an exemption that provided tax subsidies of $326.2 billion in 2015. Both liberal and conservative economists have denounced these subsidies as "regressive" and lauded a provision of the Affordable Care Act­the Cadillac Tax­that would curtail them. The claim that the subsidies are regressive rests on estimates showing that the affluent receive the largest subsidies in absolute dollars. But this claim ignores the standard definition of regressivity, which is based on the share of income paid by the wealthy versus the poor, rather than on dollar amounts. In this study, we calculate the value of tax subsidies in 2009 as a share of income for each income quintile and for the wealthiest Americans. In absolute dollars, tax subsidies were highest for families between the 80th and 95th percentiles of family income and lowest for the poorest 20%. However, as shares of income, subsidies were largest for the middle and fourth income quintiles and smallest for the wealthiest 0.5% of Americans. We conclude that the tax subsidy to employment-based insurance is neither markedly regressive, nor progressive. The Cadillac Tax will disproportionately harm families with (2009) incomes between $38,550 and $100,000, while sparing the wealthy.

Looking Under the Hood of the Cadillac Tax.

One effect of the Affordable Care Act's "Cadillac tax" (now delayed until 2020) is to undo part of the existing federal tax preference for employer-sponsored insurance. The specific features of this tax on high-cost health plans--notably, the inclusion of tax-favored savings vehicles such as health savings accounts (HSAs) in the formula for determining who is subject to the tax--are designed primarily to maximize revenue and minimize coverage disruptions, not to reduce health spending. Thus, at least initially, these savings accounts, rather than enrollee cost-sharing or other plan features, are likely to be affected most by the tax as employers act to limit their HSA contributions. Because high earners are the ones benefiting most from tax-preferred accounts, the high-cost plan tax will probably be more progressive than prior analyses have suggested, while having only a modest impact on total health spending.

Maybe the ACA Is Here To Stay, But Employers Wish That Cadillac Tax Would Go Away.

Clinton has come out against the Cadillac tax, but what will replace the revenue? If the ACA is repealed, House Republicans have proposed capping the tax exemption for health benefits as a way to curb the appetite for expensive health care benefits.

Council tax precept failed to cover cost of NLW.

Charging residents extra council tax to help pay for social care is insufficient to cover current funding gaps and has failed to cover the cost of the national living wage (NLW), a report warns.

Rethinking the Affordable Care Act's "Cadillac tax": A More Equitable Way to Encourage "Chevy" Consumption.

The Affordable Care Act's "Cadillac tax" will apply a 40 percent excise tax on total employer health insurance premiums in excess of $10,200 for single coverage and $27,500 for family coverage, starting in 2018. Employer spending on premiums is currently excluded from income and payroll taxes. Economists argue that this encourages overconsumption of health care, favors high-income workers, and reduces federal revenue. This issue brief suggests that the Cadillac tax is a "blunt instrument" for addressing these concerns because it will affect workers on a rolling timetable, does relatively little to address the regressive nature of the current exclusion, and may penalize firms and workers for cost variation that is outside their control. Replacing the current exclusion with tax credits for employer coverage that scale inversely with income might allow for regional adjustments in health care costs and eliminate aspects of the tax exclusion that favor high-income over low-income workers.

Looking Under the Hood--Top Five Open Issues for the Cadillac Tax.

The Affordable Care Act's "Cadillac tax" on high-cost group health care plans begins in 2018, yet its expected impact on employers remains an open question. Clarifying regulations, guidance and potential statutory changes between now and then will determine whether employers find the tax to be even more of an administrative burden than a financial one. This article discusses the top five open issues about the application of the tax and its administrative requirements, encouraging employers to use caution in making strategic decisions in advance of clarifying regulations and potential statutory changes.

Scaling cost-sharing to wages: how employers can reduce health spending and provide greater economic security.

In the employer-sponsored insurance market that covers most Americans; many workers are "underinsured." The evidence shows onerous out-of-pocket payments causing them to forgo needed care, miss work, and fall into bankruptcies and foreclosures. Nonetheless, many higher-paid workers are "overinsured": the evidence shows that in this domain, surplus insurance stimulates spending and price inflation without improving health. Employers can solve these problems together by scaling cost-sharing to wages. This reform would make insurance better protect against risk and guarantee access to care, while maintaining or even reducing insurance premiums. Yet, there are legal obstacles to scaled cost-sharing. The group-based nature of employer health insurance, reinforced by federal law, makes it difficult for scaling to be achieved through individual choices. The Affordable Care Act's (ACA) "essential coverage" mandate also caps cost-sharing even for wealthy workers that need no such cap. Additionally, there is a tax distortion in favor of highly paid workers purchasing healthcare through insurance rather than out-of-pocket. These problems are all surmountable. In particular, the ACA has expanded the applicability of an unenforced employee-benefits rule that prohibits "discrimination" in favor of highly compensated workers. A novel analysis shows that this statute gives the Internal Revenue Service the authority to require scaling and to thereby eliminate the current inequities and inefficiencies caused by the tax distortion. The promise is smarter insurance for over 150 million Americans.

The $500,000 deduction limitation for remuneration provided by certain health insurance providers. Final regulations.

This document contains final regulations on the application of the $500,000 deduction limitation for remuneration provided by certain health insurance providers under section 162(m)(6) of the Internal Revenue Code (Code). These regulations affect certain health insurance providers providing remuneration that exceeds the deduction limitation.

What can we expect from the "Cadillac tax" in 2018 and beyond?

One controversial aspect of the Patient Protection and Affordable Care Act is the provision to impose a 40% excise tax on insurance benefits above a certain threshold, commonly referred to as the "Cadillac tax." We use the Employer Health Benefits Survey, sponsored by the Kaiser Family Foundation and Health Research and Educational Trust, to examine the number and characteristics of plans that likely will be affected. We estimate that about 16% of plans will incur the tax upon implementation in 2018, while about 75% of plans will incur the tax a decade later due to the indexing of the tax thresholds with the Consumer Price Index. If the Cadillac tax is ultimately implemented as written, we find that it will likely reduce private health care benefits by .7% in 2018 and 3.1% in 2029, and will likely raise about $931 billion in revenue over the ensuing 10-year budget window from 2020 to 2029.

Finance 101 for Physicians.

Although physicians enjoy extensive educational backgrounds, financial planning typically is not a significant component of the curricula they have completed. As a result, many physicians could benefit from greater financial acumen, and their preparation for retirement might be lacking in light of their relatively high-income levels. This article by a private wealth advisor with 29 years of industry experience provides physicians with the basic building blocks to understand and manage their finances. It focuses on 3 pillars of financial planning: (1) protecting themselves, their families, and their assets; (2) reducing their taxes; and (3) growing their wealth.

Rite of passage: young adults and the Affordable Care Act of 2010.

Young adults between the ages of 19 and 29 represent one of the largest segments of the uninsured; approximately 13.7 million were uninsured in 2008. The problem is linked to critical transition points in young adults' lives: aging off parents' coverage when they graduate from either high school or college, and losing eligibility for public programs like Medicaid and the Children's Health Insurance Program when they turn 19. Health reform, however, has the potential to cover millions of uninsured young people. This issue brief describes critical provisions in the new law that will help, including the ability to enroll in a parent's health plan up to age 26 beginning in September 2010; significant expansion in eligibility for Medicaid, beginning in 2014; and the creation of state or regional health insurance exchanges with subsidized private insurance for people with low and moderate incomes, also beginning in 2014.

[Primary care in Portugal]. / La atención primaria en Portugal.

The economic crisis and deterioration of the Portuguese National Health service has forced professionals to leave the country. The Portuguese National Health System was introduced in 1976, but it has been unable to provide citizens with the social and health advantages of an equality of access and free national health system. The Portuguese National Health System is financed by taxes. However, a 35% of its incomes are from private sources. The health minister decides the budget, and it is based on an historical financing plus a per capita system. Portuguese citizens and immigrants are entitled to free health care, but there is a co-payment for care, diagnostic, pharmacy, and emergency care. Health care provision is a mixture of public and private health care at a regional level. It leads to fragmentation of services and greater inequalities. Doctors are civil servants. Salary is regulated and it depends on seniority and on-call shifts. Primary care activities are similar to those of their Spanish counterparts. General practitioners have gatekeeper function, but the system is imperfect, and patients with private insurance get direct access to the specialist. Specialist training is similar to the training system in Spain. Continuing education is not regulated. The Portuguese Health System has been trying to become a national health system since 1979. Political instability, fragmentation of services, lack of clarity between public and private and co-payments are important constraints. Inequalities are an important problem to reconsider while discussing a national health system.

Securing your family's future: the value of estate planning.

BACKGROUND: The authors provide an overview of general estate planning considerations, including minimization of federal estate taxes, estate planning techniques to be used to meet specific goals, and guidelines to ensure a well-drafted and well-organized plan. They also stress the importance of planning for incapacity. CONCLUSIONS: A well-thought-out and sound estate plan protects assets, minimizes estate taxes, ensures appropriate distribution to designated beneficiaries and prepares family members and business partners. In developing an estate plan, dentists should seek professional advice from a qualified attorney and a certified financial planner. Practice Implications. A sound estate plan should address business continuation or disposition with respect to the dental practice.

Funding Long-Term Care in Canada: Issues and Options.

Canada's aging population is likely to result in increased health and long-term care (LTC) costs. It is estimated that between 2012 and 2046, LTC cost liability could reach almost $1.2 trillion. Many Canadians are unaware of the potential burden of LTC expenditures, and there is no consensus on who should pay for them. There are four possible options: (1) general tax revenues; (2) social insurance (employer/employee contributions); (3) private purchase of LTC insurance; and (4) private savings. This paper reviews these options as they have materialized to date in Canada and other countries. Despite the growing acuity of this issue, it seems unlikely that a universal, publicly funded approach to LTC will emerge in Canada. It is clear that federal and provincial/territorial governments must continue to explore policy options for LTC funding including public education, prevention and mitigation strategies and provision for tax-sheltered savings specifically for LTC.