Firms still need to worry about getting caught by the 40% excise tax on “Cadillac” health care plans. While the penalties doe not kick in until 2018, there are potential risks to having to make huge last-minute cuts.
The threshold for the tax is not all that high $10,200 for an individual plan and $27,500 for a family plan. So basically only basic cover plans will be excluded assuming that the 30 – 40% increases do not continue. Or that you have an age based plan and all employees are young. Or assuming a moderate 4% annual inflation rate for health care costs, plans costing $9,070 and $24,450 today would trigger the tax.
Only about 5% of all workers’ health care plans would be affected, but bigger firms and those with mostly highly paid workers would feel the pain disproportionately.
I know that I have a number of clients that due to the pool of people the costs have exceeded the minimums and will be looking at the tax penalties or have to drop coverage to only absolute minimum levels.
Ah, our government at work. How are the unions benefit plans going to fair with there options???