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Employers Cutting Benefits Because of O-Care

From Lisa Myers at NBC News:

Large employers cite Obamacare ‘Cadillac’ tax in reducing benefits

By Talesha Reynolds and Lisa Myers | November 25, 2013

…Aaron Baker, 36, his wife Billie and their two young children are covered under a generous health insurance plan offered by the private Midwestern university where he’s worked for 10 years. When they opened their benefits notice this year, they were pleased to see their $385 premium is only up by four dollars next year. However, they were shocked to discover that instead of covering the first dollar they spend with no deductible, the Baker’s plan now includes a $1,000 deductible and a $2,500 out of pocket maximum. They also will still have small co-pays for services.

According to the enrollment notice, the changes are “to relieve future health plan trend pressure and to put the university in a position to avoid the excise tax that becomes effective in 2018.”

Meanwhile, Obama and the news media have been telling us that employers can’t be moving employees to part-time jobs yet because the employer mandate has been delayed until 2015.

The 40 percent excise tax—often called the “Cadillac tax”— is part of Obamacare and is levied on the most generous health plans. It’s designed to bring down overall health costs by making companies and workers more cost-conscious.

BS. It’s just another way in which Obama is using Obama-Care to redistribute wealth.

The thinking is that if consumers have to pay more expenses themselves, through higher deductibles and out-of-pocket expenses, they’ll avoid unnecessary or overly costly procedures. And that is supposed to make care more affordable for everyone.

Hilarious. Maybe we should try that with food stamps. And public housing.

Billie Baker doesn’t think much of that concept. “I think that saying that your insurance is too good so we’re going to give you a penalty,” she said, “is sort of outrageous to me.” Said Aaron, “You would think the government would want employers to offer good health care packages to their employees. It seems like that is not the case.”

Bingo.

A survey by the International Foundation of Employees Benefits Plans (IFEB) released in August found that 16.8 percent of respondents had already started to redesign their health plans to avoid the “Cadillac” tax and 40 percent said they are considering action. 

A survey of Fortune 1000 companies by Towers Watson, a top benefits consulting firm, found a much higher number. Sixty percent of the these major companies, which employ about 20 million American workers, say the looming excise tax is already having a “moderate” or “significant” influence on benefits decisions for 2014 and 2015. Though the tax doesn’t take effect for years, some companies are starting to make gradual changes now so as not to make dramatic changes at the last minute.

In other words, just 60% say they will change their healthcare benefits in 2014 and 2015. because of Obama-Care. That’s all.

The tax will require a company to pay a 40 percent levy, starting in 2018, on the amount by which the total costs of health plans exceeds an annual limit of $10,200 for an individual and $27,500 for a family…

Just 40%? Why not 90%?

The President’s top economic adviser, Jason Furman, says only a small percentage of plans will be hit by the tax once it takes effect four years from now.

That’s what they said about insurance policies being cancelled, too.

He disputes claims that the Affordable Care Act is causing employers to put more financial burden on employees. “There is nothing in the law that tells you you need to raise copayments or deductibles.” Furman told NBC News. “In fact, the law limits your ability to shift costs to your workers.” …

We’ve heard that song before, as well. All of these companies we were just told are going to change their benefits are just ‘anecdotes.’

This article was posted by Steve Gilbert on Tuesday, November 26th, 2013. Comments are currently closed.

One Response to “Employers Cutting Benefits Because of O-Care”

  1. mr_bill

    The thinking is that if consumers have to pay more expenses themselves, through higher deductibles and out-of-pocket expenses, they’ll avoid unnecessary or overly costly procedures. And that is supposed to make care more affordable for everyone.

    “unnecessary or overly costly procedures” like sex-change surgery that all plans are now mandated to cover?




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