More on 'cadillac insurance plan' tax

More on push back against this aspect (tax levied on insurance companies for value of plans above $8,000 for individuals; $21,000 for family cover) of the Baucus bill. I have been thinking, who has these plans? They interview a guy in Nebraska in a gov't workers union who has a salary of $50,000 and a benefit plan worth $31,000. I think of myself as having pretty good insurance, and total value of what I have is $16,000 (employer and employee share of major medical premiums; I pay total dental premium; plus what I put into a flexible spending account, which is included in determining which persons trigger the tax based on my read of Baucus bill).

If people want lots of insurance that is fine....but it is not fair to provide unlimited subsidy via the tax code for some, while others get none, simply because of who they work for. If you cap the tax exclusion at the national average ($5,000 individual; $13,000 family) then employees would look a bit more closely at their benefits....if they like lots of insurance, then fine, the premiums above the average are taxable income. If they don't, then employers and employees should be able to work it out, and employers should be roughlyneutral on which way employees want to be compensated.

As the article in the WSJ notes, some plans that are high cost may be due to the fact that a small business is providing, so the insurance is more costly.