CBO eyes employer-based insurance tax exemption

A budget options briefing released by CBO last month lists reducing preferential tax treatment for employer-sponsored health insurance as one of 16 options for reducing federal health spending. CBO states this reduction of preferential tax treatment could yield between $240 billion and $540 billion over a decade.

Reducing the tax exemption would raise federal revenues and likely decrease the number of workers with employer-based insurance, possibly seeing higher enrollment in private or public insurance exchanges.

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