It’s not too often that employers and unions come out in support of the same legislative initiative. But that’s exactly what’s happening with a proposed repeal of the Affordable Care Act excise tax, and it’s fueled a bipartisan effort in Congress to repeal it. The tax, currently scheduled to take effect in 2018, could affect one-third of large employers.
This Cadillac tax on high-cost group health plans would force employers to pay a 40% tax on plans exceeding $27,500 for a family and $10,200 for an individual. The “Middle Class Health Benefits Tax Repeal Act,” the latest effort to repeal the bill by the House Democrats, has a Republican counterpart pending. While neither bill is expected to gain traction in the near future, the impending tax is already having repercussions on employers who are making plans to counter it with such measures as dropping health care coverage for spouses or dependents of employees.
One of the most significant problems cited with the tax is that it has a far-reaching grasp—too many middle-class plans are swept up in the process. At the very least, some experts say, the threshold needs to change so that only true Cadillac plans are being taxed.
Many also doubt that it will raise anywhere near the $87 billion in revenue the Congressional Budget Office is expecting—employers just aren’t going to increase wages to offset the decrease in health benefits.
Do you have questions about the Affordable Care Act and how it will affect your business? We encourage you to contact Chuck Farro, owner of Marsh & McLennan Agency formerly Benefits Resource Group. Marsh & McLennan Agency formerly Benefits Resource Group partners with privately held businesses, individuals and public companies that are seeking solutions that go beyond traditional employee benefits services to help them better manage their bottom line.
You may contact Chuck by phone at 216-520-5001 or by email at firstname.lastname@example.org.