HARRISBURG -- As lawmakers grapple with an unfinished budget, Obamacare is threatening to send a multi-million dollar stink bomb for budgets just around the bend.
As soon as 2018, the state could be forced to pay a so-called "Cadillac tax" that, under the Affordable Care Act, penalizes employers who offer expensive health insurance benefits to their workers.
The money is meant to fund other Obamacare provisions, such as subsidizing insurance for those who can't afford coverage. The Congressional Budget Office estimates the tax will generate $87 billion over a decade.
Critics say the bar for high-end health insurance plans is set too low, and too many will get hit.
"The Cadillac tax is more of a Camry tax. It's hitting both the public and the private sector," said Elizabeth Stelle, director of policy for the Commonwealth Foundation, a conservative think tank in Harrisburg.
State projections suggest that health plans for active workers will not be affected, said Dan Egan, spokesman for the Office of Administration.
But the tax could hit a plan that covers 64,000 retired state employees and 40,000 of their dependents. The Retired Employee Health Program covers retirees who are not yet eligible for Medicare.
As things now stand, the Cadillac tax will levy a 40 percent charge on employers for the amount of an insurance premium that exceeds $10,200 for individuals and $27,500 for families.
For next year, the state projects that its Retired Employee Health Program will cost more than $12,600 for individuals and $28,000 for families. The state isn't scheduled to pay the tax until 2018.
Based on the 40 percent rate, the tax would cost the state at least $32 million a year but could easily top $100 million a year, depending on how many dependents are insured.
Egan said much could change before then.
"This is an issue that the commonwealth is watching closely," he said. "However, until the regulations are finalized, we don't know fully how costs are going to be calculated, nor do we know the exact thresholds we will be measured against."
Another retiree plan, for 10,000 retired troopers and their families, also exceeds the tax threshold. But state officials, for Obamacare purposes, intend to merge the retired troopers' plan with one covering existing state police, Egan said.
Officials don't yet have an estimated cost of the merged state police plans, he said.
Overall, about 1 in 4 employers in the country will have to pay the Cadillac tax, said Craig Palosky, spokesman for the Kaiser Family Foundation.
Stelle, at the Commonwealth Foundation, said most private employers are adjusting by trying to get cheaper insurance for their workers.
Government employers -- who are more likely to be dealing with labor contracts with public sector unions -- are also more likely surpass the threshold and be on the hook for the federal tax, according to the National Conference of State Legislatures. That's because health care cove
Jackson Brainerd, a researcher with the group, pointed to a recent survey of nearly 10,000 employers by United Benefit Advisors. It found the average cost for health plans provided by government employers was $11,329 per employee -- $1,129 above the Cadillac tax threshold.
In New York City, officials say the Cadillac tax could cost them $22 million in 2018 and reach $549 million by 2022, according to an analysis by the Brookings Institution.
The issue of the Cadillac tax was the subject of an October summit of Midwestern state fiscal policy leaders in Chicago. While the meeting organized by the Conference of State Legislatures was for regional leaders, the issue by no means is limited to that region, Brainerd said.
Experts at the meeting suggested that the Cadillac tax is proving to be so politically toxic that there likely will be changes before it takes effect in 2018, he said.
John Finnerty covers the Pennsylvania Statehouse for CNHI's newspapers and websites. Reach him at jfinnerty@cnhi.com.
The post Cadillac Tax Could Snare Some State Health Plans appeared first on SuperShare.Info.
from WordPress http://ift.tt/1LYGh83
via IFTTT
0 Response to " Cadillac Tax Could Snare Some State Health Plans "
Post a Comment