New surveys from the American Health Policy Institute found 90% of large employers are taking steps to try and prevent their company from having a plan that triggers the Cadillac tax in 2018.
- The "Cadillac tax” is a controversial measure intended to reign in healthcare spending via an excise surcharge (40%) on high-cost employer sponsored health insurance plans. It will go into effect in 2018.
In addition, the surveys found over 30% of large employers said they would have at least one plan impacted by the excise tax in 2018.
Save the perennial return of the McRib, the Cadillac tax has been on the tip of everyone’s tongue this summer and autumn. From presidential hopefuls Bernie Sanders and Hillary Clinton to 101 economists, everyone has an opinion on the measure. Most public comments fall on the side of opinion the tax does greater harm than good and some bills have been introduced to repeal the measure. Add AHIP's surveys to the till.
AHPI conducted two new surveys of large employers, in June and September of 2015, to identify how many of the companies surveyed would be impacted by the excise tax and what steps they are planning to minimize their exposure to the tax.
Among employers who are going to reduce the values of their plans as a result of the excise tax, 71% said that they probably would not provide a corresponding wage increase; 16% said they would raise wages in response to benefit cuts.
“As the new surveys show, the excise tax is going to impose real costs on both employees and employers alike, and continues to be an important health policy issue,” said Dr. Tevi Troy, AHIP’s president. “The real problem with the excise tax, and the reason that it generates so much bipartisan opposition, is due to the impact it has on American workers. Even though the tax has not yet gone into effect, American businesses are already taking steps to avoid hitting Cadillac tax thresholds, and those actions will be hitting more and more workers over time.”