Health insurers are paying more taxes than they would have without a provision of the Affordable Care Act that took effect last year, according to a new study. The report, by the Institute for Policy Studies, addresses the impact of the provision, which wiped out the insurers’ corporate tax deductions on executive compensation over $500,000.
The think tank found that for 10 publicly traded health insurers it examined for the study, “corporate taxes on their pay would likely increase in coming years because some 2013 compensation included stock options that predated the law,” Reuters reported.
The study contends that if the law’s tax code applied to all companies, not just health insurers, it would generate an additional $50 billion in revenue for the U.S. government.
UnitedHealth was affected most by the new tax rule in 2013, for which it “paid $19 million more in corporate taxes, based on a rate of 35%,” than it would have without the newly effective ACA provision, the study found, according to Reuters.
Wellpoint managed to save more than $1.5 million on its 2013 corporate taxes “by accelerating the vesting of executive stock awards into late 2012 just before the reform took place.” Still, Wellpoint paid $10 million more in corporate taxes than it would have without the new rule.
Photo: Pete Souza, Executive Office of the President of the United States