CQ’s Carey Discusses Tax Treatment of Employer-Sponsored Health Coverage, Tobacco Regulation Bill, Foreign Nurse Visas Legislation

Mary Agnes Carey, associate editor of CQ HealthBeat, discusses possible changes to tax rules for employer-sponsored health coverage, House approval of legislation that would allow FDA to regulate tobacco and a House committee's approval of a bill that would allow more visas to be issued to foreign nurses in this week's "Health on the Hill from kaisernetwork.org and CQ."

According to Carey, the Senate Finance Committee heard testimony about possible changes to the treatment of tax subsidies for employer-sponsored health benefits, which excludes premiums paid by employers from taxable income for employees. Economists at the hearing said that changing the tax treatment could generate up to $250 billion annually to help provide coverage to the uninsured. However, witnesses testified that the changes also could produce problems for those who receive employer-sponsored health care. For example, employers could refuse to offer insurance, which could make it more difficult for older and sicker employees to purchase private coverage because group premiums often are lower than individual premiums. If employers would drop coverage, there also is the possibility that they could raise employee wages with the money that would have gone to pay for health insurance, Carey says. Witnesses said that the change could be made slowly, requiring that private insurers do not charge sicker members higher rates and requiring that all people purchase coverage.

Carey also discusses a bill (HR 1108) approved by a veto-proof 326-102 margin in the House that would allow FDA to regulate tobacco and nicotine levels. The bill would not allow FDA to ban cigarettes or nicotine outright, but it would impose restrictions on how cigarettes can be advertised and sold. Under the bill, FDA would receive regulatory funding from fees placed on tobacco product manufacturers and importers. It is not known when the Senate will consider the legislation, though several Republican senators have expressed opposition to the measure. The White House says the bill could lead people to think some tobacco products are safe and would distract FDA from its primary duties of drug and food safety. The administration also objects to the proposed tax on cigarettes that would finance the bill.

In addition, Carey discusses approval of legislation (HR 5924) by the House Judiciary subcommittee that would provide 20,000 visas annually for three years to address a nursing shortage in the U.S. Bill sponsor Rep. Robert Wexler (D-Fla.) said hospitals have more than 115,000 nursing vacancies, and HHS has warned that the number could grow to one million by 2020. The legislation also would provide grants to U.S. nursing schools to help boost enrollment, as well as grants to fund new nursing training programs. Opponents of the measure say that if sectors like nursing are given special visa treatment, it will impede comprehensive immigration reform.

The complete audio version of "Health on the Hill," transcript and resources for further research are available online at kaisernetwork.org.