Analysis: Excise Tax Could Equally Hit Union, Nonunion Health Plans

A new analysis shows that a proposed excise tax on high-cost insurance plans would affect both union and nonunion plans, the Washington Post reports.

At least 80% of the workers whose insurance coverage would be subject to the tax in 2019 would be nonunion employees, which aligns with the overall breakdown of union and nonunion workers who have employer-provided health coverage.

Organized labor has strongly opposed the tax, which would be used to fund health reform legislation.

Analysis Details

Ken Jacobs of the University of California at Berkeley Labor Center and William Dow, a professor of health economics at Berkeley and a member of President George W. Bush' Council of Economic Advisors, conducted the analysis. The study received funding from the California Endowment and the Institute for America's Future.

The analysis considered two versions of the excise tax and found similar results for both iterations. The Senate health reform bill (HR 3590) includes a 40% excise tax -- expected to raise $150 billion over a decade -- on plans worth more than $23,000 for families and $8,500 for individuals.

In January, the White House and organized labor leaders negotiated a separate version of the tax that raises the threshold for affected plans, limits the tax for businesses that employ many female and older workers, and exempts government workers and union plans from the tax until 2018.

The analysis found that the changes would lower revenue from the tax by $41 billion, and 71% of that would accrue to nonunion workers.