7. The enactment of H.R. 3590, the “Patient Protection and Affordable Care Act,” included an excise tax on high cost employer-sponsored health coverage. Even though this tax is levied against the insurance provider and the tax does not go into effect until January 2018, the provision is strongly opposed by the Fraternal Order of Police because it could result in a decrease in the quality or increase the cost of plans for law enforcement officers. The provision imposes a forty percent (40%) tax to premiums above $27,500 for family plans and $10,200 for individuals. (For example an individual plan worth $11,200 would pay a $400 tax.) There is an increased threshold for employees engaged in high risk professions, which includes law enforcement, of $3,000 for family plans and $1,350 for individual plans. Essentially any plan for a law enforcement officer that is under $30,500 (for a family) or $11,550 (for an individual) would be exempt from the tax. Also, the thresholds are indexed to increase at the rate of inflation. As President, what steps will you take to repeal this tax and will you pledge to oppose any direct or indirect tax on health plans?
Obama: Health care reform is already expanding health care coverage, saving Americans money, and improving our health. Thanks to the law, 105 million Americans no longer have lifetime limits on their coverage, as many as 18 million children with pre-existing conditions can no longer be denied coverage, and 2.5 million young adults have gained coverage through their parents’ plan.
The law also includes an excise tax on health care plans with the very highest premiums, which will reduce premiums and contribute to long-term deficit reduction. We improved this provision in the legislative process by delaying the effective date by five years, raising the premium amounts that are exempt from taxation, providing an allowance for plans whose health costs are higher due to the age or gender of their workers and including a permanent adjustment in favor of high-risk occupations such as first responders.
Romney: I have been a consistent and vocal opponent of Obamacare. On my first day in office I will issue an executive order that begins to relieve states of the law’s onerous burdens, and I will work with Congress to repeal the law entirely. My proposal for true health care reform increases state flexibility, promotes market competition, and enhances consumer choice. To achieve those ends I have called for a change in the tax treatment of health insurance. I believe that all Americans should receive the same tax benefit for purchasing health insurance, regardless of whether they purchase it individually, or receive it from an employer or union.
8. The Fraternal Order of Police strongly supports the use of Defined Benefit (DB) pension plans for public employees and is concerned that these plans are under fire at the State and local level in favor of Defined Contribution (DC) plans, which do not have guaranteed benefits for retirees. Many State lawmakers have proposed legislation which would replace existing Defined Benefit plans with Defined Contribution plans, thereby reducing retirement benefits for employees. What is your position in respect to Defined Benefit and Defined Contribution plans and how might your Administration address this issue at the Federal level?
Obama: After working for a lifetime, American workers deserve to be able to rely on a secure retirement. My administration is committed to strengthening the pension system while also giving Americans more and better choices to save for retirement. I have proposed doubling tax credits for small employers that start pension plans and establishing automatic workplace retirement accounts. I support the continuation of defined benefit plans for federal law enforcement employees.
Romney: Much of the private sector has already made a transition from Defined Benefit to Defined Contribution plans, and I believe it will be beneficial to state and local governments to make a similar transition. Defined Contribution plans help to control costs and protect future taxpayers, offer employees greater flexibility and choice, and avoid situations in which unfunded liabilities threaten both government budgets and retirement security. I would not seek to use the power of the federal government to prevent state or local governments from making this transition.