Business Groups Question Health Benefits Cost Disclosure Bill In Senate

Main Category: Health Insurance / Medical Insurance
Also Included In: Public Health
Article Date: 15 Oct 2008 - 6:00 PDT

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Several business groups are "reacting with caution" to a bill proposed last week that would require employers to show the entire cost of an employee's health coverage on a tax form, CongressDaily reports (Edney, CongressDaily, 10/10). Under the legislation -- sponsored by Senate Finance Committee Chair Max Baucus (D-Mont.) and ranking member Chuck Grassley (R-Iowa), Senate Health, Education, Labor and Pensions Committee ranking member Michael Enzi (R-Wyo.), and Sens. Ron Wyden (D-Ore.) and Ben Nelson (D-Neb.) -- employers would have to disclose on annual W-2 tax forms the amount spent on health insurance premiums for employees and their families, as well as the amount spent on dental and vision coverage (Kaiser Daily Health Policy Report, 10/8). The senators believe that showing employees the cost of health care they lose in wages will encourage them to be more thoughtful in making health care decisions and help reduce health care costs, CongressDaily reports.

Some business groups have said they oppose the bill because some larger businesses already report health coverage costs in an annual compensation sheet that compiles the costs of health care, retirement, transportation and any other benefits that accompany wages. Paul Dennett, senior vice president for health reform at the American Benefits Council, said firms should be allowed to continue using this method to inform workers of health care costs, rather than W-2s. He also said the U.S. Treasury Department and Labor Department should develop a model similar to the annual compensation sheet.

Others cited cost as a major concern because benefit information typically is kept separate from payroll information, and creating a way to "interface" the two systems would introduce significant new costs, CongressDaily reports. In addition, some business groups are concerned that disclosing the cost information to the government could lead to additional taxation or determining the amount of total payroll employers spend on health coverage, according to CongressDaily (CongressDaily, 10/10).

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