A Tax On Health Benefits?

More than half of American would either switch to a less costly insurance plan, shop around, or drop coverage,  if Congress taxes health benefits  to raise money as part of the deal to avoid the fiscal cliff.  It’s one of many ideas being floated,  but  the nonpartisan Employee Benefit Research Institute (EBRI) found if employer based coverage becomes taxable:

  • 26 %  want to switch to a cheaper plan
  • 21% say they’d  shop directly with insurers
  •  9 %t say they’d  drop their coverage.


Yet nearly 39%  say they would continue with their current level of coverage.

The EBRI found  health benefits are a key a factor for workers when they choose a job, and health insurance is the most important employee benefit.

“Most Americans are satisfied with the health benefits they have now and prefer not to change the mix of benefits and wages,” said Paul Fronstin, director of EBRI’s health Research and Education Program and author of the report. “About three-quarters say they are satisfied with the health benefits they currently receive, while 15 percent say they would trade wages to get more health benefits, and 9 percent say they would surrender health benefits for higher wages.”

Here are 2 additional stats from the study:

  • 34% preferred to choose their insurance plan, have their employers give them the money that was being spent on their behalf, and then pay the remaining amounts themselves.
  • 23% prefer their employers give them money and allow them  to decide whether to purchase coverage, and how much to spend.


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Barbara Nevins Taylor

As the winner of 22 Emmy Awards and a slew of journalism honors and awards, I created ConsumerMojo.com to give you the straight story about complicated stuff. Tell us what you want to know and we'll get you the answers.