Rhode Island Offers Business Health Insurance With Pre-Tax Income

Health Insurance in Rhode Island

Rhode Island Lawmakers recently acted on health care legislation according to which businesses that have more than 25 employees will offer an opportunity for the workers to buy health insurance with pre-tax income.

Gov. Don Carcieri (R) of Rhode Island last week signed legislation that will require businesses with 25 or more employees to offer workers the opportunity to buy health insurance with pre-tax income, the Providence Journal reports. The tax break is expected to save workers up to 40% of the premium cost, depending on the employee's tax bracket, according to the state Office of the Health Insurance Commissioner.

The law requires that businesses set up a payroll deduction mechanism for employees but does not require businesses to pay anything toward their employees' health insurance.

Under the law, employees can choose whether to participate in the program, and employers can offer a variety of plans for using the pre-tax dollars, including vision coverage, dental coverage, medical coverage and life insurance.

The state Department of Labor and Training will issue regulations to detail the steps businesses must take in order to comply with the health insurance law, which will take effect in 2009 (Gudrais, Providence Journal, 7/5).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.