WASHINGTON—An employer benefits trade group said Tuesday it won’t support health care reform legislation before the Senate unless the measure is revamped.
“We are unable to support the Senate bill in its current form and are increasingly disturbed that significant progress has yet to be made to address the problems it poses for employer-sponsored care,” American Benefits Council President James Klein wrote in a letter to Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky.
“Without significant improvements, we will have no alternative but to oppose the legislation as it is considered further by the Senate,” Mr. Klein wrote.
Improvements that ABC said should be made to the bill include:
Among other things, ABC said the tax threshold should be raised, while the annual increase in threshold amounts should be linked to an index that reflects increases in health care costs.
Imposing penalties after such a short period of time creates a disincentive for employers in high-turnover industries to hire new employees, ABC said.
“If the favorable tax treatment of these payments to employers is eliminated, it will unquestionably result in fewer employers sponsoring this benefit and increase Medicare’s costs for providing the same benefit through the Part D program,” the Washington-based ABC said in the letter.
In addition, employers would have to take a charge against earnings to reflect the loss of the tax break, which “could make more it more difficult for companies to borrow funds,” the employer benefits trade group said.
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