WASHINGTON - Rep. Pat Tiberi says a new rule exempting some groups from a $63 tax on each person covered in a self-insured health plan doesn't go far enough. Under President Barack Obama's 2010 health-care law, the administration created a three-year levy aimed at helping pay for new insurance consumers with costly medical conditions.
WASHINGTON — Rep. Pat Tiberi says a new rule exempting some groups from a $63 tax on each person covered in a self-insured health plan doesn’t go far enough.
Under President Barack Obama’s 2010 health-care law, the administration created a three-year levy aimed at helping pay for new insurance consumers with costly medical conditions.
The tax was imposed on self-insured health plans, such as the ones large employers offer their employees. It was nicknamed the “bellybutton tax” because it was imposed on each “bellybutton” covered through such plans, such as dependents of the employee.
But this week, the administration released a rule exempting some self-insured, self-administered health-care plans from the tax for 2015 and 2016.
A proposed rule published by the Department of Health and Human Services in the Federal Register said that the levy was intended to apply only to those who used a third party to administer insurance, not those who “self-administered” insurance.
The argument, said one proponent of the rule, was that insurance companies that paid the $63 fee would ultimately reap a financial benefit by gaining customers.
Tiberi, a senior member of the House Ways and Means Committee, said those “self-administered plans” are primarily unions, leaving most large employers on the hook.
But David Mallino, legislative director for the Laborers’ International Union of North America, said the rule wouldn’t affect most of their plans, which use third-party administrators.
Last month, Tiberi, R-Genoa Township, and Rep. Daniel Lipinski, D-Ill., introduced a bill that would repeal the tax. Sixteen House members have sponsored the bill; other than Tiberi, the only other Ohioan to co-sponsor the bill is Rep. Mike Turner, R-Dayton.
Among those who have voiced support for the bill is the Laborers’ International Union of North America.
Tiberi said the tax is unfair and wouldn’t even benefit the “bellybuttons” being taxed.
The tax, he said, was “another incentive for employees to say, ‘The heck with this.’” He predicted the costs would be passed on to employees.