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Employers Trading In "Cadillac" Plans For More Tax-Friendly Models

05/28/13

  05:06:35 pm, by MedBen5   , 205 words,  
Categories: News, Health Plan Management

Employers Trading In "Cadillac" Plans For More Tax-Friendly Models

“The 2010 Affordable Care Act’s so-called Cadillac tax on high-premium health plans was initially projected to bring in $137 billion over the next decade. That estimate has now been trimmed to about $80 billion, a $57 billion decrease, the Congressional Budget Office said in a report [earlier this month].

“The [ACA] includes a 40 percent tax on employee benefits exceeding $10,200 for individuals and $27,500 for families, on the theory that overly generous plans boost medical costs. Companies have responded by pressing hospitals for better rates, adding wellness programs and raising deductibles on workers, said Steve Wojcik, a vice president at the National Business Group on Health[…]

“Largely because of a drop-off in projected tax revenues, the estimated cost of implementing the law through 2023 rose by $40 billion to $1.36 trillion, the budget office said.

“The law imposes the ‘cadillac’ tax starting in 2018. Sixty-one percent of employers with 500 workers or more said in a 2011 survey that they expected to trigger the tax unless they took steps, according to Mercer Inc., a Washington-based benefits consultant.”

Read more at Bloomberg.com. And a reminder to MedBen clients: Should you at any time have questions about the tax implications of your health care plan, please contact Vice President of Compliance Caroline Fraker at cfraker@medben.com.

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