The 2010 Affordable Care Act (ACA) sharply reduced taxpayer subsidies last year for executive pay at the nation's 10 largest publicly held health insurance companies, according to a new report by the Institute for Policy Studies (IPS), a Washington-D.C.-based think tank.
Last year, an ACA provision took effect that put a $500,000 cap on the tax deductibility of health insurer executive compensation. Previously, the companies had a $1 million limit on the deductibility of executive pay from federal corporate income taxes. Now, health insurance companies are allowed to deduct only up to $500,000 in combined performance-based and salary pay per employee each year.
As a result of the deductibility limits under the health reform legislation known as Obamacare, the country's top 10 health insurers saw their collective corporate taxes increase by an estimated $72 million in 2013, according to the report, "Executive Excess 2014: The Obamacare Prescription for Bloated CEO Pay."