Aug 27 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
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
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
The report said that if all corporations were to be taxed
this way, it would raise $50 billion more in revenue for the
"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
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
(Reporting by Caroline Humer in New York; editing by Matthew