Partner Edward Rayner Speaks to Crain’s New York Business About Impact of Health Reform on Taxes
Partner Edward Rayner, the Chair of Pryor Cashman’s Executive Compensation, ERISA and Employee Benefits Group, was interviewed by Crain’s New York Business for its February 20, 2011 article, “Health reform brings tax man on house call – Wealthy face new payroll, investment charges. Let the dollar shuffle begin.”
The article notes that the new federal health care law is loaded up front with taxes and sets forth different ways to minimize their impact. Rayner told Crain’s that one way to do this is to ask your employer to front-load your income. “Say your salary is $500,000 a year. Ask your employer for $800,000 in 2011 and 2012, and just $200,000 in 2013 and 2014.” Rayner noted the obvious problem is that your employer can't know whether you'll stick around after two years. “You're kind of limited in what you can do,” he said.
Rayner also discussed the VIP health insurance coverage that many companies reserve for their highly paid employees. The article notes that elite health insurance plans, ones that are off-limits to the rank and file, appear to be a doomed species. Since last fall, they have faced a stiff excise tax of $100 per day per covered employee. Companies with pre-existing plans are exempt from the tax. But their “grandfathered” status goes out the window if they adjust their plan—and adjustments occur constantly to such plans' deductible and co-pay arrangements. “Any change to the terms pretty much blows your exemption,” said Rayner.
To read the entire article, please click here.
