3 Things to Know: Will Insurance CEO’s See a Raise in Pay Due to the GOP Healthcare Provision?

Everyone has a myriad of questions about what changes the GOP’s Health Care Provision will bring along with it and one of the questions is whether the changes will mean a bigger payday for insurance company executives?

There are several factors which can affect this decision.

While thousands of people are unhappy with a lot of provisions in the bill since it will mean they will become virtually uninsured.

There is a small group of people who will benefit from certain provisions made in the Bill and these are indeed executives at insurance companies because yes, they will indeed see an increase in their salaries.

And here is why:

• ACA Provision Removed

The BCRA and House’s GOP American Health Care Act will change one of the provisions which were in the Affordable Care Act which will now make it more expensive for insurance companies to pay their executives. The provision will be detrimental to the company itself however it will definitely benefit the CEOs.

• Rules for Insurance Companies Changed

Under the provisions made in the Affordable Care Act, insurance companies were also subject to the same rules that any corporation operating within America was subjected to. However, with this new provision, this scenario has changed.

Under the Affordable Care Act, insurance companies could deduct about 1 million dollars from their earnings. These earnings are the ones which a company declares to the internal revenue service (IRS) and does not include stock options and reimbursements. This means that insurance companies executives lost out on about 1 million dollars from their pay which the company then kept for itself.

However, with the new provision in the House’s GOP American Health Care Act the amount has been reduced to 500,000 dollars this means that the company itself will have a reduced amount of its earnings to pocket.

And that is not it; this amount will NOT include stock options and reimbursements. Hence the company will have to shell out an even bigger amount to its executives.

According to the current report on the House’s GOP American Health Care Act; the rules for insurance companies were specifically identified with the wordings to show that the stock options and reimbursements were not to be included when evaluating how much insurance companies had earned for the defined time period.

• Typical Corporation

Under the provisions currently made in the American Health Care Act and Better Care Reconciliation Act and according to current reports, diverging from the rules for typical corporations which insurance companies will not be able to follow, they will otherwise be subjected to the rules.

This means that they now have an incentive to pay their executives more since most times corporations tend to pay their executives more when they make more profits too.