Insurers pay more tax on executive comp under Obamacare -study
Aug 27 (Reuters) - When Washington eliminated corporate tax deductions on health insurance executive compensation above $500,000 under President Barack Obama's healthcare reform law in 2013, it generated more than $72 million in additional tax revenue for the U.S. government, a left-leaning think tank said on Wednesday.
The report from the Institute for Policy Studies examined executive compensation in the 2013 proxy filings from WellPoint Inc and UnitedHealth Group Inc, among others, and found that those companies paid more taxes than they would have if the law had not been passed.
The study, written by a team that focuses on executive compensation issues, provides a look into how much revenue the government could raise if it eliminated this deduction more broadly.
After examining the 10 largest publicly traded health insurers, it found that corporate taxes on their pay would likely increase in coming years because some 2013 compensation included stock options that predated the law.
Based on those disclosures, it calculated the corporate tax each company paid on the compensation of the top five executives versus what the companies would have paid based on the U.S. tax code that applied to insurers prior to 2013 and that continues to be used by most other U.S. corporations outside of the health insurance industry.
The report said that if all corporations were to be taxed this way, it would raise $50 billion more in revenue for the U.S. government.
"I do see real momentum in applying this across the board," Sarah Anderson, Global Economy Project Director at the institute and a report author, said. "The report shows that the sky is not falling on these companies."
Health insurers have been at the center of the national healthcare reform law, which has set new benefit standards for coverage, changed government payments for private Medicare benefits, expanded Medicaid to more income levels and created a new type of health insurance for individuals.
The law also instituted limits on insurer profit and created new premium rate review procedures and taxes for insurers and corporations.
Brendan Buck, a spokesman for the insurance industry's largest lobbying group, America's Health Insurance Plans, said,
"Requiring plans to pay higher taxes does nothing to make coverage more affordable or accessible."
The nation's biggest health insurer, UnitedHealth, had the largest change in corporate tax payments under the new rules, according to the report. It paid $19 million more in corporate taxes, based on a rate of 35 percent.
WellPoint lowered its 2013 corporate tax bill by more than $1.5 million by accelerating the vesting of executive stock awards into late 2012 just before the reform took place, the report said. The company, which reported compensation on six executives in its proxy, paid about $10 million more in corporate taxes in 2013 than it would have under the old rules.
WellPoint declined to comment. UnitedHealth was not immediately available.
(Reporting by Caroline Humer in New York; editing by Matthew Lewis)