HBA-MPM S.C.R. 37 77(R) BILL ANALYSIS Office of House Bill AnalysisS.C.R. 37 By: Nelson Insurance 5/10/2001 Engrossed BACKGROUND AND PURPOSE Almost 90 percent of all health insurance is paid for by and through employer programs, providing the majority of American workers with affordable access to health care. Federal tax code provisions that make employee contributions to employer-provided health insurance fully deductible from federal individual income taxes allow employees participating in such plans to purchase the coverage in a cost-effective manner. However, some individuals are unable to participate in an employer-provided health plan, and those who purchase private health insurance do not receive tax breaks of any kind. For these individuals, a dollar in pretax wages may buy only 50 cents' worth of health insurance after federal, state, and local taxes are deducted. Congress responded to this issue with the 1999 Omnibus Appropriations Act, which gives a 60 percent tax deduction for insurance expenses to those who are self-employed. This deduction is scheduled to rise to 100 percent by 2003. For individuals who purchase private health insurance and bear the full cost of a policy without the benefit of an employer's contributions, this deduction does little to make that private insurance affordable since tax deductions provide a less substantial tax break than tax credits. Tax credits would give consumers more choice in health plans because employees would no longer be limited to insurance offered by employers. Senate Concurrent Resolution 37 urges the Congress of the United States to provide tax credits to individuals buying private health insurance. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this resolution does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS Senate Concurrent Resolution 37 urges the Congress of the United States to provide tax credits to individuals buying private health insurance.