ClaimLinx Strategy Cuts Healthcare Costs, Beats New Tax Hike

Business Wire, June 12, 2009

CINCINNATI -- President Obama has announced he is considering taxing Americans on the value of employer-provided health benefits. Those benefits are currently tax-free, and the congressional Joint Economic Committee estimates that the tax break costs the Treasury $226 billion per year in revenue. Obama’s goal would be to raise revenue to finance coverage for the uninsured and subsidize coverage for low-income workers and those who lose their jobs. But the move would reverse decades of tax savings dating all the way back to World War II.

Tom Quigley is National Sales Manager of ClaimLinx, LLC, a Cincinnati-based benefits administrator. He says that the real solution is to cut the cost of benefits. “Obama wants to reform the way we pay for healthcare in America,” says the maverick advisor. “But his tax proposal does little more than rearrange deck chairs on the Titanic. Why isn’t he promoting existing solutions to make health care more affordable, without enriching the insurance agents and carriers who clearly aren’t getting that job done?”

Quigley’s “ClaimLinx” strategy takes advantage of a 55-year-old tax law, Internal Revenue Code Section 105b, which lets employers reimburse their employees for medical costs they incur for themselves, their spouses, and their dependents. This, in turn, lets employers buy less expensive, higher-deductible insurance coverage – then reimburse their employees directly for the difference between the old deductible and the new.

The net result, Quigley reports, generally cuts costs 20-80% off of traditional benefit programs. That saves employers money and avoids tax on higher benefits.

“Unfortunately, traditional health insurance agents and even some carriers are reluctant to embrace the strategy,” Quigley continues. “Refinancing health benefits through the 105 plan is a smart move, just like refinancing your house when rates drop. Yes, it cuts out the insurance ‘middleman.’ And the middleman never likes to be cut out! But average family health insurance premiums exceed $10,500. The new administration needs to look outside the current insurance-dominated system for real solutions.”

More information is available online at www.claimlinx.com