Regulations

‘Cadillac Tax’ Could Affect 1 in 4 Employers

By Robert Sheen | August 26, 2015

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New projections from the Kaiser Family Foundation estimate that in 2018 one in four (26%) offering benefits could be subject to the Act’s excise - , also known as the “ plan” , unless they make changes to their .

The Foundation says that figure could grow significantly over — to % in 2023 and 42% in 2028 — if these remain unchanged and benefit costs increase at expected rates.

However, the notes that it is likely that many will change their to avoid the , reducing for employees or shifting costs to workers in the form higher deductibles and other patient sharing.

The ’s - takes effect in 2018. The is 40% each ’s benefits that exceed certain thresholds. In 2018 the thresholds are $10,200 for self-only and $27,500 for other than self-only . The thresholds increase annually with inflation.

The is intended both to raise revenue to fund expansions under the law and to help contain spending.

The Foundation’s analysis is titled “How Many Could be Affected by the Plan ?” It estimates the percentage who one or more that would reach “ ” thresholds for some employees, and who thus would face a choice between paying the or restructuring their benefits to avoid it.

Kaiser provides projections for 2018, 2023 and 2028, using different scenarios, including with and without flexible spending accounts; vs. ; and with various growth rates in premiums. The estimates assume the remain unchanged.

The analysis also explains how the - plan works and describes its implications for how structure and administer their benefits.

Posted in Affordable Care Act, Legislation, Regulations

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