U.S. Chamber Calls for Individual Tax Deductions for Health Insurance Premiums

WASHINGTON, DC - The United States Chamber of Commerce today called on Congress to provide more fairness in health coverage by allowing tax deductions for individuals who purchase their own health insurance.

"It is unfair to penalize taxpayers who purchase their own health insurance, yet proivide a tax break to those who are self-employed or covered through work," said Kate Sullivan, Chamber Director of Health Care Policy. It is simple fairness that all taxpayers who do the right thing and obtain health coverage for themselves and their families be able to deduct those costs."

Currently, individuals who purchase their own coverage must pay their premiums on an after-tax basis, while the self-employed receive a partial deduction, which will become a full deduction in 2003, the Chamber noted.
Employers who provide coverage may deduct those costs and workers covered by employer health plans also don't pay taxes on the value of those benefits. Further, many employees who participate in cafeteria-style benefits programs may pay their premiums on a pre-tax basis.

"Contrary to comments by Congressman David Bonior, employers are unlikely to drop group coverage just because workers are given the ability to deduct the cost of individually purchased health plans," said Sullivan. "Individual coverage is more difficult to come by and much more expensive than group coverage obtained through the workplace."

Bonior's concern that a simple act of fairness to provide a tax deduction to individuals might spur some employers to drop health coverage for their workers is misplaced. "Far more harmful to the continued availability of employer-provided coverage are the efforts in Congress to expose employers to expanded liability for the actions of their health plans," said Sullivan.

The U.S. Chamber is the world's largest business federation representing more than three million businesses of every size, sector, and region.

# # #

00-143