There is wide support to repeal the current ObamaCare (ACA) Cadillac Tax due to take effect in 2022 for #employers and affecting Group Health Plans and Employee Benefit offerings by companies. The tax was introduced by Obama as a way to help pay for the uninsured citizens in the US. The Cadillac Tax would impose a 40% TAX on sponsors of #GroupHealth Plans. Plans that have amounts over $11,100 for employee-only and $29,750 for family coverage, would fall under that tax and would be adjusted for inflation annually. Employer groups are nervous that even though the Cadillac Tax was delayed until 2022….they have to prepare well in advance for any types of changes in the Employee Benefit landscape.
The Cadillac Tax would have a devastating affect on employer groups and companies
To reach the threshold of $11,100 and $29,750 for an employer, would not be that hard to do. Much of it depends on the ages of the employees, geographical location of the business and the availability of affordable Group Health Insurance plans. Many business owners, CFOs and Controllers that I speak to, can barely afford to offer the coverage to their employees now. Add a devastating Cadillac Tax onto that, and many of them will give up the Employee Benefits offering. Employers are in a tough spot too, especially in the Bay Area of CA. There is so much competition for talent, that NOT offering Employee Benefits put companies at a major disadvantage.
What about companies that have over 50 employees that HAVE to offer Health Insurance to their employees
If a company has over 50 employees, they MUST offer Group Health Insurance to their employees. If the Cadillac Tax does take affect, those companies are really in trouble. They cannot simply drop coverage, or face the huge ACA, ObamaCare penalties associated with the #EmployerMandate. Between the Cadillac Tax and the ACA Employer Mandate fines, one of them would most certainly put some companies out of business.
HR 748, the Middle Class Health Benefits Tax Repeal Act
Last month the House introduced H.R. 748, titled the Middle Class Health Benefits Tax Repeal Act. It has bipartisan support with both Republicans and Democrats….which is unusual in and of itself. Law makers are working to either repeal the Cadillac Tax or somehow revise it to make it more reasonable. With both parties working on it….we’ll see what happens.
Steve Brauer-Principal, Brauer Insurance Services LLC www.brauerinsurance.com (877) 421-4325