That's Where the Money Is!

By William Brunk, CEO
First Source Benefits Group

Congress is trying to find enough of our money to fund multi-billion dollar healthcare reform. And by George, I think they've found it, right under their pointed noses!

It's a combination of 1) the current tax deductibility of employer-paid health insurance premiums, 2) the tax-free financing of healthcare premiums paid by employees through Sec. 125 cafeteria plans, 3) the tax-free financing of healthcare expenses through FSAs and HRAs, and 4) the tax-free financing of medical and other qualified expenses through the somewhat-new HSA programs. These tax-favored programs total about $226 billion annually in lost revenue to the government. Congress is obviously salivating over this feast like a peckish chap when served a plateful of Montgomery Inn ribs!

In accessing this monetary smorgasbord, Congress will likely cap or eliminate tax deductible health insurance premiums and tax-free health expenses, both of which are currently "on the table" and will probably be an integral part of reform. To what extent, I'm not sure. But any changes in favor of Uncle Sam may retard or eliminate FSAs and HRAs as we know them, and eventually put employer-based healthcare in jeopardy. From what I've heard, the "sacred cow" through all of this could be HSAs, which just might escape unscathed by the taxman. But when you're playing political football, "it ain't over 'til it's over".

Any way you look at it, folks, it's a tax increase. Think about it - they take from the very people who are responsible enough to pay for and maintain healthcare insurance coverage for themselves and their families, and give to those who are not so responsible.

Hmmmmmm. And so it goes....dessert anyone?