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  • Is Congress Exempting Itself From Health Insurance Tax?

    It is still far from clear what the White House’s new strategy to pass health care reform will be in the face of Scott Brown’s election to the Senate. But according to Federal News Radio negotiations between the House and Senate are still ongoing, including this victory for House Democrats:

    Federal employees covered under some of the more expensive plans in the Federal Employees Heath Benefit Program now have some breathing room as well.

    Federal workers had been left out of an earlier compromise on health care reform shielding union workers from a proposed 40-percent excise tax until 2018.

    The office of Rep. Gerald Connolly (D-Va.) says he “personally called the White House to express his concern of leaving federal employees out of the deal.” An agreement reached Wednesday extends the exemption to federal employees through 2018 as well.

    The Senate bill’s health insurance excise tax is terrible public policy. Although the insurance companies would technically make the tax payment (a 40% levy on insurance plans worth more than $8,000 a year for individuals) they would undoubtedly pass this cost along to employers purchasing the plans for their workers in the form of higher premiums. Employers, in turn, would pass that cost on to their workers by lowering other forms of compensation like wages. Once the excise tax is passed on to workers, the result is no different than an increase in their income taxes. Faced with the possibility of paying substantially higher taxes, many workers would logically look for ways to avoid the tax. The first way they could avoid it would be by reducing the value of their health benefits below the threshold. If workers take less expensive health care coverage, they would want higher wages so as not to experience a reduction in total compensation. But this would not allow them to escape higher taxes completely, since higher wages would also be taxed.

    Instead of facing this mess, Congress has reportedly chosen to exempt federal workers … which last time we checked included Members of Congress.

    Posted in Obamacare [slideshow_deploy]

    28 Responses to Is Congress Exempting Itself From Health Insurance Tax?

    1. Jeff, Cape Coral, FL says:

      Union members, federal workers, and Congress get a pass on paying taxes … leaving the rest of us to continue paying their benefits at the expense of our own. Public sector jobs – the recipients of this giveaway – are increasing in number while the private sector is hemorrhaging jobs and STILL expected to pay for all this? In what alternate universe does this make sense?

    2. DJ Filak says:

      Fire the lot of money grubers, from the top on down. There should be NO exceptions, especially for our so called Elected Politicians. Any raises or perks should first be put to Public vote, not their own.Balance the budget? CUT their wages back to 1960 standards and give them the same raises they passed on to SS, cut their retirement back to SS levels, give them the same health care that is provided to Veterans. No more traipsing around the country/world on info junkets, use internet conferencing, save a lot of bucks and pollution.

    3. Richard, Orem, UT says:

      This makes me want to puke! What they are doing is totally outside and opposite of the Constitution. Anyone, and I mean A-N-Y-O-N-E who votes for this is elegible for impeachment or treason charges. So take your pick. The SCOTUS must declare it unconstitutional becasue congress cannot pass a law that exempts them and they cannot pass any law that favors them. All men are created equal! But believe me, intelligence isn't gauranteed by the Constitution and there is a complete lack of it in the Federal Government! Dweebs!

    4. Jill, California says:

      Why can't we the people … their bosses … dictate the health plans they get, the salaries they are paid, and the money they can spend? When and why did Congress steal the power that was reserved to us?

    5. Joe Bob Joe, Oklahom says:

      I sure am glad we got rid of that "Culture of Corruption" clan. Now we have Hope and Change in our pockets.

      Oddly though, it sure seems familiar. Maybe my Alzheimer's is kicking in again.

    6. Drew Page, IL says:

      Did anyone expect anything less from Congress. It exempts itself from most legislation it passes.

      Everyone saw that the President, the Senate, the House, indeed all federal employees were going to be exempt from the national health care plan they had in mind for the rest of America. It was the most asked question at Townhall meeting sponsored by politicians and at Tea Party tax protests and it was the question that went most unanswered by politicians. Their mantra is "do as I say, not as I do".

      Do you think for one moment that these same people would even consider putting themselves under Social Security for their pensions? Absolutely not. They are most aware of how Congress has repeatedly taken money from what was to be a "Social Security lockbox" to be used for Social Security pensions only. Of course they leave worthless IOUs, to be made up by future generations of taxpayers.

      Why must federal employees have annual salaries that are 70% higher than the average salaries of non-government workers, why do they have health insurance benefits higher than the average American worker and why must federal employees have pensions that will provide three times as much in retirement benefits than what is available to the average American worker under Social Security? The answer to that question is simple. These people feel that they are special and that they deserve better, in all things, than the average American they profess to serve. You wonder where the arrogance of the politicians in the Senate and House come from? Why should have to answer to rabble like those that show up at Townhall meetings and Tea Parties? Why shouldn't they be given preferential treatment in all things? Private jets? Of course, why not?

      Dozens of Congressmen, their spouses, family members and friends fly off to Copenhagen in private jets, arriving at five-star hotels in limos for the big party — all at taxpayer expense — to "deal with" the imminent catastrophe of 'global warming'. And how dare any of you rabble criticize them for such 'necessary' expenditures?

      Too many of our representatives are self-indulgent thieves, conning their way through their tenure in office, taking all the perks they can, enriching themselves along the way, waiting for their lifetime pension annuities of 80% of their salaries and the time when they can become lobbyists for the special interests they served while in office.

      How could there be any doubt that they would exempt cadillac government health plans from the tax they have in mind for the rest of us?

    7. philip hilliker says:

      All they can see is their self. Their greed lets them think they are better than the american people,and they beleave they deserve more and better quality insurance than we are intidle too . This justiifys the the perks they give each other. It's time to vote these representives out of office

    8. Leslie, Lowell MI says:

      And is anyone surprised? Not me!

    9. Normca says:

      Barack Hussein Obama, mmm, mmm, mmm. Ho's that Hope and Change ? What a sham and the media that blasted the previous president of the United States for everything including the way he uttered a word; Nuclear. Many of us recognize Barry has no principles as a follower of Rev Wright. It is my hope the media that omits events, like these exemptions and the terrorists that were released from Gitmo last week, to protect Barry, will one day receive the same scorn as the Tea Party participants have shown the democratics.

    10. Tim Az says:

      I find it interesting that the thieves in the house are now left to trust that the thieves in the senate will make the changes that the thieves in the house want after the bill has been signed by Mao-Bama. This is their best hope to get this bill to the Ones desk. I'm not sure any of these thieves trust each other any more than their own constituates. what delicious irony.

    11. David Hoag, Ohio says:

      This has either got to be the most stupid bunch Washington has ever seen or the most sinister. They have got to be either totally unaware of the will of the American people and the consequences of their own actions or totally uninterested in these things and committed to their own agenda. Health care is only one aspect of it. Wake up, people.

    12. Ed-Sugar Land says:

      It has been several months past,but I commented on the cost of healthcare and what it would look like to the rest of us after congress and obama cronies exempt themselves from tax. We ll if we are not a part of the cronieship we are doomed. It is know different then what Ben Nelson did, wheel and deal under the table so that we pay for the benefit for their healthcare package. We need to dump the currant congress and put people in that really care about America. obama has thus far been a thorn in the side of the people and we need continue to replace his cronies from the senate, congress and the White House. We must strip him down and show the American people his true colors.

    13. Dennis Social Circle says:

      I f the health care plan is so great, then Congress and obama should be the first to join up. They will not because it is not that great. The dems and obama will keep the union out because they owe to much to see them in the same boat as the rest of us. This is all part of the "hope and change" all were promised.

    14. Alan Viard, American says:

      Drew Page of Illinois asks, "Do you think for one moment that these same people [President and Congress] would even consider putting themselves under Social Security for their pensions? Absolutely not." In reality, Congress subjected its own members, along with the President and Vice President, to the Social Security system and its taxes, effective in January 1984. The myth that Congress is not covered by Social Security is widespread, but is completely incorrect.

      Congress has, unfortunately, exempted itself from many of the laws that it imposes on others. As of 1984, however, Social Security is no longer one of them.

      Alan Viard

      American Enterprise Institute

    15. Ben C. Ann Arbor, MI says:

      Clearly Congress et al assumes voters are apathetic and ignorant. Clearly the elitists’ feel they are the only ones cerebral enough to care for us poor folks. Their arrogance is astounding. I hope they keep this attitude until November 10th.

    16. Craig Klima Baltimor says:

      Now I know what it feels like to be raped !! It all falls back on the "Middle Class" the low wage earners get credits, The high wage earners with Rolls Royce Health Care get exemptions and all the people in the middle get the shaft !! The money spending illegal alien loving Democrats must go, first impeach Obama and his cronies Reid and CO. then vote the rest out in 2010 and 2012 !!

    17. Bill, TN says:

      Wait a moment…let me think through this: Congress takes the stand that they (the elected and hired government employees) get something the rest of us could never expect? Oh this could not possibly be…we must have all misunderstood.

      Lets wait for surely they can "explain" everything in simple. uneducated, language so we will understand they "did it for us!"

    18. Shellpicker, FL says:

      Lets face it, federal workers are the only ones working anymore. The rest are part time to avoid paying for insurance. The government has f__cked the rest of us. So what is new.

    19. Spiritof76, NH says:

      Time for civil disobedience. The "public servants" have become slave masters and we, the people are the slaves.

    20. DAN says:


    21. Judy, MA says:

      My suggestion is spread the word to all you know about what they are doing. It will be time to vote these criminals out in 2010 & 2012. We'll get our Country back. It happened in VA, NJ & yessssssssss! Liberal state of Massachusetts!!!!!!! Be patient. God Bless Our Country.

    22. Gail, TX says:

      Here's a thought no one has considered…

      The whole point of this health care bill (according to Obama) is to lower health care costs and to insure millions of uninsured.

      But by taxing the "cadillac plans," Obama is RAISING health care costs for those people!

      And talk about a catch-22! Under this bill, people who are uninsured who do not purchase insurance will be penalized; they will have to pay a fine for not buying insurance. But those who do have good insurance will have to pay a fine for having great insurance!

      How does that make any sense? Why in the world are they punishing people for not having inruance AND punishing people for having good insurnace? How stupid is that?

      Of course, the reality is that this bill was never meant to lower health care costs or to insure people. This bill has always been about controlling every aspect of our lives. When you realize this fact, that's when you realize the bill makes perfect sense.

    23. Pingback: The Cloakroom » Fact of the Day Forty One

    24. oracle, Mo. says:

      In order to understand what is going on in America, a suggestion would be for everyone to read "Atlas Shrugged" written by Ayn Rand. What is happening in our country can be seen in this somewhat prophetic book.

      Who is John Galt?

    25. Pingback: Family Research Council: The More Things Change… | Union County Republican Central Committee

    26. William, Malta, Ohio says:

      I'm a Federal retiree, and I agree with the huge majority of people who think exempting federal employees from taxes that would be paid by the average joe is wrong. I say this for two reasons, First, even though I'm a federal retiree, I'm still an average joe. Second, as an average joe AND a federal retiree, I know that the dingleberries in DC WILL exempt themselves. As a result, most of them will be thrown out of office, and the new congress can repeal the whole damned mess of a "reformed" health care system. The current bills don't have a prayer of reducing costs, nor providing better care. These bills need to be scrapped, dumped on the putrid pile of garbage that only DC can create. Start anew and get it right!

    27. Linda, Louisiana says:

      I always thought that what was good for the Goose was also good for the Gander. Unfortunately, we have people who think they are too good to share with the rest of us. Undoubtedly, those people don't believe in Equality.

      These Health Plans, House & Senate and whatever Pres. Obama wants needs to be completely thrown out. The President has not really stated his opinions; he has given his contacts in Congress the ball and let them run with it. Little do that realize that they are jeopardizing their political future; their political future does not bother me in the least. They will get all the blame and Obama will say, once again, "It is not my fault." This Administration needs to go, and Soon.

    28. Nancy K says:


      WE, the people, must stop this bill from being enacted. EVERYONE should call their senators and reps and speak up! Send letters via snail mail, send emails, etc…..

      WE, the people pay 28% of congressional healthcare. That amounts to around $1M per year just for those 535 government employees. Since those same people all make at LEAST $174,000 per year, they should foot the entire amount. Now, multiply this out by the millions of government employess and we have enough money left over to pay the bill for 46M uninsured americans to be part of the government plan with no tax increase!

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