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President's Budget Wants Smaller Insurance Tax Breaks For Higher Earners

04/12/13

  05:22:48 pm, by MedBen5   , 218 words,  
Categories: News, Health Plan Management

President's Budget Wants Smaller Insurance Tax Breaks For Higher Earners

Earlier this week, President Obama submitted his Fiscal Year 2014 Proposed Budget, which calls for $3.77 trillion in overall spending. On its website, the Employers Council on Flexible Compensation highlighted several aspects of the budget of particular interest to members of group health and 401K plans, among others:

“[T]he President’s proposed budget once again calls for reducing the value of itemized deductions and other tax preferences to 28 percent for families with incomes in the highest tax brackets. The provision would apply to all itemized deductions; employer-sponsored health insurance; retirement contributions; certain above the line deductions; foreign excluded income, and tax-exempt interest. The President also has proposed a new limit on tax-deferred retirement accounts, with the limit based on the amount that could finance an annuity of $250,000/year in retirement. The Administration estimates that in 2013, the limit would be $3 million.”

The budget as presented would also rescind the sequester, which, as we mentioned on this blog last month, would reduce the Small Business Health Care Tax Credit for some small tax-exempt employers.

Should any of these provisions find their way into the approved budget, we will note them here. In the meantime, MedBen clients with any questions regarding tax changes as they pertain to health care plans may contact Vice President of Compliance Caroline Fraker at cfraker@medben.com.

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