HCS HB 1677 -- HEALTH INSURANCE PREMIUM DEDUCTION

SPONSOR:  Sutherland (Ervin)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Ways and
Means by a vote of 14 to 0.

This substitute authorizes a phased-in income tax deduction for
health insurance premiums paid by the taxpayer for the taxpayer,
the taxpayer's spouse, or the taxpayer's dependents.  For tax
year 2006, a 20% deduction is allowed, 40% for 2007, 60% for
2008, 80% for 2009, and 100% for 2010.

The provisions of the substitute will expire six years from the
effective date.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of Up to
$28,076,990 in FY 2007, Up to $56,078,226 in FY 2008, and Up to
$84,080,187 in FY 2009.  No impact on Other State Funds in FY
2007, FY 2008, and FY 2009.

PROPONENTS:  Supporters say that the bill allows health insurance
premiums to be taken as a deduction.  If an employer offers
insurance, the employees can purchase it with pre-tax dollars as
opposed to the employee purchasing their own plan and paying the
premiums with after-tax-dollars.  The bill is for health care
insurance premiums only and not for long-term care insurance.
Since some employers are asking employees to pay a portion of the
premiums as costs increase, the bill will help alleviate part of
the burden on employees and help employers maintain group
insurance coverage.

Testifying for the bill were Representative Ervin; National
Federation of Independent Business; Taxpayers Research Institute
of Missouri; Missouri Insurance Coalition; Golden Rule Insurance
Company; Missouri's Health Insurance Plans; United Healthcare;
and America's Health Insurance Plans.

OPPONENTS:  There was no opposition voiced to the committee.

Karla Strobel, Legislative Analyst

Missouri House of Representatives
93rd General Assembly, 2nd Regular Session
Last Updated November 29, 2006 at 9:44 am