TAXES AND YOUR HEALTH CARE PREMIUMS

TAXES AND YOUR HEALTH CARE PREMIUMS

The IRS Tax Codes regarding Health Care Premiums (Cafeteria Plans, Section 125) allows employers to set up a POP or “Premium only Payment” system that itemizes employer contributions to a Health Plan and lists them as non-taxable for the federal portion of your income.

Indeed this has been set up by various Maritime Unions that are now requiring active members to help fund their Medical Plans.


Many tax breaks have been put forth to make Health Care affordable for the employed, but what about the retired. Not only the retired who can take advantage of a sponsored Health Plan after their retirement, but all those retired millions on limited incomes that desperately need affordable health care.

Write your Senators and Congressmen and take up the fight for additional Tax Legislation in the upcoming year to benefit those of us who have paid our dues.

Below is the response I received from Senator Dianne Feinstein (Dem. California) to a letter about such benefits being initiated for retirees taking advantage of a sponsored Health Plan. I have yet to receive a response from Senator Barbara Boxer (Dem. California).


DIANNE FEINSTEIN

UNITED STATES SENATE

WASHINGTON, DC 20510—0504

November 27, 2006

Mr. Walter Fletcher

Dear Mr. Fletcher:

Thank you for contacting me to express your concerns about health care for retirees. I appreciate the time you took to write and welcome the opportunity to respond.

I understand the escalating cost of some health insurance premiums continues to make obtaining health insurance difficult, if not impossible, for many Americans, especially those who anticipate receiving health benefits in their retirement from their employer. I agree with you that we must work to remove these barriers so that all Americans have access to health care services.

I voted in favor of the “Pension Protection Act of 2006”, which passed in the Senate on August 3, 2006, by a vote of 93-5. As you said, currently many employers offer their employees health insurance plans for which employees can use pre-tax dollars to pay premiums. I appreciate hearing your suggestion that this benefit should be extended to retirees participating in sponsored health plans and will examine the feasibility of this idea. I will keep your thoughts in mind as the senate considers tax legislation.
Again, thank you for writing. If you have any further questions or comments, please do not hesitate to contact my Washington, D.C. office at (202) 224-3841 or visit http://feinstein.senate.gov. Best regards.


Sincerely

Dianne Feinstein United States Senator