From State Senator Joe Leibham

~ Health Care Tax Relief Bill Moves Forward ~

I am pleased to report that an important health care tax relief bill, that I have co-sponsored, was recently passed by the State Senate and will hopefully make its way to the desk of Governor Scott Walker for his consideration in the near future.  I co-sponsored the bill at the request of numerous local constituents who contacted me and asked me to provide leadership on this important tax relief initiative.

The proposal, known as Senate Bill (SB) 203 & Assembly Bill (AB) 277 will provide a state individual income tax exclusion for the value of an employer-provided health insurance benefit that is extended to an employee’s non-dependent child who is under the age of 27 years.  The need for this tax reform came about as a result of the 2010 passage of the federal Affordable Health Care Act which allows non-dependent children to remain on a parents health insurance plan until they turn 27 years old.

Numerous constituents have contacted me who recently received information from their employer that their income would be taxed on the fair market value of the health insurance coverage extended to their non-dependant children.  For many families, this will equate to thousands of dollars of additional tax liability.

While Wisconsin tax law currently excludes the value of an employer-provided health insurance benefit for an employee, their spouse and dependent children, SB 203/AB 277 are needed to extend this exclusion to non-dependant children.  The proposal is written so that the new tax exclusion would be retroactive to January 1, 2011 so the change would cover all of tax year 2011 and future tax years.

While this tax exclusion will help many Wisconsin families and make health insurance for young adults more affordable and accessible, it will mean that our state will receive less tax revenue.  The state Department of Revenue (DOR) estimates that this new tax policy will reduce state tax revenue by $4.5 million over the 2011-13 biennium. 

Again, based on the requests I received from numerous area constituents and on my overall goal to reduce the tax burden placed on Wisconsin’s middle class families, I have enjoyed providing leadership on and support for this proposal that will make health care for young adults more affordable and available. 

For more information on the proposal link to:  https://docs.legis.wisconsin.gov/document/proposaltext/2011/REG/SB203