title: A federal tax credit to encourage employers to offer health coverage.
abstract: Many firms that employ low-wage workers cannot afford to offer an employee health plan, and many of the uninsured work for such firms. This article makes the case for an employer tax credit, administered by the Internal Revenue Service, as a way to extend health coverage to uninsured workers and their families. The permanent, fixed-dollar, refundable credit would be available to all low-wage employers (those with average wages of $10 per hour and less), including those already offering coverage. The credit would be graduated depending on average wage: the maximum credit would equal 50% of the cost of a standard benefit package; the minimum would equal 30% of the package. It also would vary by family size and could be used to cover part-time and temporary workers. Participating employers would be required to pay at least 50% of the health insurance premium, proof of which would be shown on firms' tax returns. The paper provides justification for this approach. It closes with a discussion of strengths and weaknesses of this approach and alternative design features.
authors.affiliation: Economic and Social Research Institute, Washington, DC 20036, USA.
authors.forename: J A
authors.initials: JA
authors.lastname: Meyer
authors.forename: E K
authors.initials: EK
authors.lastname: Wicks
mesh_terms: D000328:Adult; D000329:Advertising; D002648:Child; D004608:Eligibility Determination; D017049:Employer Health Costs; D005380:Financing, Government / Q000458:organization & administration*; D006264:Health Benefit Plans, Employee / Q000191:economics* / Q000458:organization & administration; D006291:Health Policy; D006801:Humans; D019458:Insurance Coverage; D017057:Medically Uninsured; D017146:Models, Organizational; D013660:Taxes; D014481:United States