It would “cut the current $1 million tax shelter for insurance companies’ executive compensation,” according to a press release.
Current law allows businesses to deduct up to $1 million annually per executive as a business expense. Lincoln’s proposal would limit this amount to $400,000—the President’s salary—for health insurance companies that will profit as a result of health insurance reform.
Lincoln’s plan, to be offered as an amendment to health insurance reform legislation, does not dictate what a business pays an employee, but it does limit the taxpayer subsidies for the compensation. The proposal is expected to raise about $651 million over the next 10 years, which will be required to go toward the Medicare Trust Fund to continue providing the benefits our seniors need and deserve.
Lincoln’s amendment applies to insurance companies that earn at least 25 percent of their income from premiums that are generated by the individual health insurance mandate in the bill. Should health insurance reform become law, these companies would profit from millions of new customers purchasing insurance coverage for the first time. Lincoln’s amendment will ensure that premiums from new enrollees are paying for better care, not executives’ salaries.
Sixty votes were needed for passage. The amendment text is linked here.
(credit image – getty)