Greetings,

Many of you already have contacted your senators in support of real healthcare reform, and we thank you. However, our work is not done. It is just beginning.

We need to defend our current health insurance benefits, which could be taxed--but not if we speak up now. Please call your Senators on October 7. Remember, your voice is the most important one in this debate.

Here is where things stand right now. At this moment, key Senate committees are negotiating what will be included in the final legislation on which senators will vote. Some good bills have been proposed in both the House and the Senate, but the Senate Finance Committee's bill contains provisions that are not real health care reform. One of the worst proposals is the one that would tax our health benefits.

President Obama pledged to work with Congress to solve the crisis without negatively impacting those who already have employer-provided health insurance. The Senate Finance Committee's bill fails that test!

The provision is a 40 percent excise tax on health insurance plans that would go into effect in 2013 for health benefits above certain threshold amounts. Our analysis shows that this would negatively impact our members because rising premiums are very likely to hit the threshold levels soon after 2013.

We still have a chance to prevent this tax increase from being in the final version of the Senate bill.

The House version does not tax health benefits, so if Congress goes into conference committee without taxation provisions in either House or Senate bills, we have the best chance of stopping this provision from ruining the health care reform legislation that finally passes.

Call your senators on Wednesday, October 7. This toll-free number will assist your call: 866/327-8670
AFT National Call-in Day Flyer:
http://rutgersaaup.org/hc_reform/call_senate_AFT_70ct09.pdf

Some specific details on how the excise tax would impact you: 

The current version of the Senate Finance bill would require in 2013, a 40 percent excise tax on family plans that exceed $21,000 in value and individual plans that exceed $8,000. The legislation establishes that the threshold value would be indexed at the Consumer Price Index plus 1, but this is not an adequate level to keep pace with rising premium costs. 

Horizon NJ Direct premiums for the CY 2010 are scheduled to increase 10% (outpacing inflation, which is only 4% right now). If premiums continue to rise 10% a year, then by 2014, a individual plan under NJ Direct 15 would exceed the $8,000 value. A NJ Direct15 Family Plan would exceed the $21,000 figure in CY 2015. As Rutgers employees, we already pay a 1.5% contribution towards our health insurance in addition to co-pays. Such a provision could hurt many of our members; it is a permanent tax that would make our health care unaffordable in a few short years.

Read details on this and other talking points at www.rutgersaaup.org and tell your senators that you want reform that will: 

• Not tax our health insurance benefits;
• Provide affordable coverage for all Americans;
• Encourage competition by including a national public health insurance plan option;
• Prevent employers from dropping coverage; and
• Prevent shifting new Medicare costs to states.

If you would like to follow the debate more closely and hear about local actions, please contact staff rep, Cathy Stanford, at cstanford@rutgersaaup.org or call 732-964-1000. ext. 10.  

Sincerely,

Adrienne Eaton
President, Rutgers AAUP-AFT