Employees of large South Florida corporations may get hit with a new tax on their healthcare benefits under a bipartisan proposal being supported by 14 United States senators.

The move, led by Sen. Ron Wyden, a Democrat from Oregon, is aimed at taxing the most expensive employer-based plans in the United States. Wyden told The Miami Herald that he is ''very, very, very much aware'' that Miami's healthcare costs are among the highest in the country.

The prospects for such a tax have been bouncing up and down in Congress over the past few weeks as politicians seek viable solutions.

On Friday, the Associated Press reported that key House leaders were going in another direction, pushing to raise taxes on the wealthy to pay for healthcare reforms -- a move that will be opposed by Republicans and some moderate Democrats.

The idea of a tax on health insurance is intended to to accomplish two major objectives of healthcare reform:

• Lower costs and over-utilization of services in order to pay for caring for the presently uninsured.

• Create a ''level playing field'' so that taxes are the same for those who get their healthcare benefits at work and those who purchase insurance in the individual market.

At present, employer-based coverage is a big windfall . Corporations get a tax break because the premiums are a cost of doing business. For workers, it's a benefit, often worth $13,000 or more, for which they pay no taxes.

Meanwhile, persons purchasing individual policies get no tax break.

Last year, Sen. John McCain, R-Ariz., maintained during his presidential campaign that doing away with the tax break was necessary for reform. Barack Obama opposed the tax change because he felt it would undermine employer-based coverage.

Wyden has come up with a compromise. Under this plan, businesses would still deduct healthcare as an expense while individuals would be given a tax deduction for health insurance.

Under the present proposal, the deduction would be $17,240 a year for a family and $6,800 for an individual -- numbers 10 percent above the worth of the average federal employee's coverage in the year 2013, when healthcare reforms might start.

In a phone interview, Wyden said the average employer-based family policy is now about $13,500 a year for both the employer and employee part of the premium. Subtracting that amount from the $17,240 threshold would mean the average family would get a deduction of $3,740.

Under this plan, the Joint Committee on Taxation calculates 35.5 million persons would see their tax bills lowered, 95.5 million would pay about the same -- and 28.8 million would pay more taxes.

That group is likely to include well compensated executives -- and quite a few employees in South Florida.

A study released by the Milliman consulting firm earlier this year reported that employer-based health insurance in Miami was the highest of any of 14 major metropolitan areas surveyed -- $20,282 a year for a family of four. That's 21 percent higher than the national average.

That figure includes the family's out-of-pocket costs, which Milliman calculated at 17 percent nationwide, meaning the employer and employee premium payments in Miami would be about $16,834 this year.

That's now below the proposed Wyden threshold. But if premium costs increase 5 percent a year -- a conservative estimate well below last year's 7.4 percent increase -- the average Miami area employer-based premium would cost $20,461 in 2013, when the reforms could begin.

Under that scenario, the average South Florida resident with an employer-based plan could pay tax on an extra $3,000 in income.

Baptist Health South Florida reports that about a third of its employees are presently enrolled in a plan worth more than $17,000 a year, according to spokeswoman Jo Baxter. The hospital system is certain its healthcare costs will be higher by 2013, but didn't want to guess by how much.

Join the discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. In order to post comments, you must be a registered user of MiamiHerald.com. Your username will show along with the comments you post. Thank you for taking the time to offer your thoughts.

     Showing: Oldest first Newest first Most-recommended first Least-recommended first

@Nyx.AuthorDisplayName@ wrote on @Nyx.PostedAtTime@:

@Nyx.repliedToText@

@Nyx.replyAnswerText@

Reply to this Comment @Nyx.Recommender@ @Nyx.AbuseReporter@