As Health Care Reform legislation is beginning to take shape in multiple committees in both Houses of Congress, the only area of concern which could significantly affect FOP members is the "High Cost Insurance Excise Tax," which is part of the bill currently being considered before the Senate Committee on Finance.

• The current draft includes an excise tax of 40% percent on insurance companies and plan administrators for any employer-sponsored health coverage that is above the threshold of $8,000 for singles and $21,000 for family plans beginning in 2013. The threshold is indexed to the Consumer Price Index for Urban Consumers, as determined by the Department of Labor beginning in 2014, plus one percent (CPI+1).
  
  
  • The CPI+1 index is well below the inflation rate of Health Premiums in recent years. Estimates by the Joint Committee on Taxation have more than a quarter of all family and individual healthcare plans by 2015 falling under the tax.
    
    
  • In the case of a self insured group, the excise tax would be paid by the plan administrator (The law enforcement agency or local government).
    
    
  • The threshold amount for plans that cover employees engaged in high risk professions, including law enforcement, is increased by $1,850 for individual coverage and $5,000 for family coverage.
    
    
    • Beginning in 2013 the threshold for law enforcement officers would be $9,850 for an individual and $26,000 for families. (The threshold is also increased similarly for retirees, but there is no double dipping.)
      
      
• Even though the proposed excise tax is levied on the insurance companies and not law enforcement officers, the cost of the tax is likely to be passed on to our members in increased cost, less coverage, or a combination of both.
  
  
• There is no taxation of employer provided benefits on the individual, but employers are required to provide the amount of the benefit on the W-2.
  
  

The "High Cost Insurance Excise Tax," has so far only been considered before the Senate Committee on Finance. The House Committees on Ways and Means, Energy and Commerce, and Education and Labor, as well as the Senate Committee on Health Education and Labor have not included this provision.

Senator John Kerry (D-MA) originally planned on offering an amendment during the Senate Committee's on Finance's markup to scale the tax back, but instead he may offer it on the Senate floor. Also, one hundred and fifty seven (157) House Democrats signed a letter to House Speaker Nancy Pelosi indicating opposition to the "High Cost Insurance Excise Tax."

The FOP is concerned with any provisions in Health Care Reform legislation which could negatively impact our members. Other labor and public safety organizations that have come out or are working against the Excise tax include: the International Association of Fire Fighters, the National Education Association, American Federation of State, County and Municipal Employees, United Mine Workers of America, and American Federation of Teachers.