Health Coverage Exclusion Cap

Currently, taxpayers who receive employer-sponsored health benefits are not taxed on the value of those benefits. A group of Republicans in Congress have recently proposed creating a cap on the current employee tax exclusion for employer-sponsored health insurance benefits. While the proposal did not contain a specified amount for the cap, a separate paper released by a conservative research firm called for capping the tax exclusion at 125 percent of the national average value of employer-sponsored health insurance plans.

We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about recent Congressional proposals to impose a cap on the value of employer-sponsored health coverage that can be excluded from taxable income.

Below is a summary of the debate that ensued between the two professors.