The Cost of Tax-Exempt Health Benefits In 2004
February 2004
The tax expenditure for health benefits is the amount of revenues that the federal government foregoes by exempting health benefits and spending from the federal income and Social Security taxes, including (1) employer health benefit contributions for workers and retirees, (2) health benefit deductions for the self-employed, (3) health spending under flexible spending plans, and (4) the tax deduction for health expenses. In this article, The Lewin Group estimated the amount of the tax expenditure in 2004 using its Health Benefits Simulation Model (HBSM), a microsimulation model of the U.S. health care system.