Report | Health

How Capping the Tax Exclusion May Disproportionately Burden Children & Families

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This report was originally published by FirstFocus.

Released by First Focus as part of the Insuring our Future series, this new report reveals that health reform proposals taxing employer-sponsored benefits are detrimental to dependent children covered through family plans. The report finds that this is true even if those proposals only cap, rather than eliminate, the tax exclusion that currently exists. The study confirms that proposals currently being discussed do not accurately reflect the relative prices of single and family plans, resulting in those with family plans seeing a higher share of their premiums taxed than their single counterparts.

Authored by Elise Gould, Director of Health Policy Research at the Economic Policy Institute, the report goes on to explain in addition to higher out of pocket costs for family plans, several other negative outcomes exist for families. The breakup of family insurance arrangements, reductions in the quality of insurance offered to families, and cutbacks in benefits covered for children are among the problems the report uncovers.

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