Skip to main content
Sister Publication Links
  • Automotive News
  • Rubber News
  • European Rubber Journal
Subscribe
  • Login
  • Register
  • Subscribe
  • Current Issue
  • BEST PLACES TO WORK
  • News
    • MID YEAR REPORT
    • TIRE MAKERS
    • HUMANITARIAN
    • COMMERCIAL TIRE
    • GOVERNMENT & LAW
    • MERGERS & ACQUISITIONS
    • OBITUARIES
    • OPINION
    • SERVICE ZONE
  • ADAS
  • Data
    • DATA STORE
  • Custom
    • SPONSORED CONTENT
  • Events
    • ASK THE EXPERT
    • LIVESTREAMS
    • WEBINARS
    • SEMA LIVESTREAMS
    • RUBBER NEWS EVENTS
  • Resources
    • ADVERTISE
    • AWARDS
    • CLASSIFIEDS
    • DIRECTORY
    • SHOP FLOOR
    • Best Places to Work
    • BALANCING
    • DEMOUNTING
    • SAFETY
    • TIRE REPAIR
    • TPMS
    • TRAINING
    • VEHICLE LIFTING
    • WHEEL TORQUE
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. News
September 24, 2014 02:00 AM

Healthcare tax looms for many employers who don't change plans

Crain News Service
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    By Jerry Geisel, Crain News Service

    CHICAGO (Sept. 24, 2014) — Without design changes to their healthcare plans, nearly half of large employers could be liable for a federal excise tax created by the healthcare reform law when it takes effect in 2018, according to a new analysis by Towers Watson & Co.

    The analysis of health plans offered by employers with at least 5,000 employees projects that 48 percent of the employers could be hit by the tax in 2018, with 82 percent affected by 2023.

    The analysis assumes that medical costs will rise 7 percent annually and that employers will maintain their current plan designs.

    While the tax is well-known, how it is calculated is not, Randall Abbott, a senior Towers Watson health strategist in Boston, said in a statement.

    For example, he said, the excise tax is calculated on both employer and employee premium contributions. In addition, future changes to the health plan premium excise tax cost trigger—$10,200 for single coverage and $27,500 for family coverage in 2018—will be linked to annual increases in the consumer price index, not to healthcare cost inflation.

    “For most employers, the excise tax will be a question of when, not if, unless action is taken,” Mr. Abbott said in the statement.

    The Patient Protection and Affordable Care (ACA) “has put a timer on cost management for many employers, and unless one cuts benefits or improves program performance, there's a real risk of triggering it,” Mr. Abbott added.

    Indeed, more employers are considering and adopting consumer-driven health plans, which, because of their high deductibles, are much less expensive than more traditional plan designs and will be less likely to trigger the excise tax.

    “The migration to account-based plans has been steady for more than a decade but has unquestionably accelerated under health reform. Our latest surveys indicate a continued exploration and adoption rate by employers in the years ahead with more and more considering full replacement. The ACA has put a time clock on cost management, and the race is on. 2018 is the starting line, not the finish line,” Mr. Abbott said.

    This report appeared on the website of Crain's Business Insurance magazine, a Chicago-based sister publication of Tire Business.

    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

    Most Popular
    1
    Canada court rules for Michelin in tire trademark case
    2
    Grupo Tersa's Rodrigo Valle Hernandez dies at 69
    3
    Atlantic Tire & Service founder Blackman dies at 69
    4
    Goodyear unveils Wrangler Boulder MT tire
    5
    ATD sponsors Gary Sinise Foundation event
    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Newsletter Center

    Staying current is easy with Tire Business delivered straight to your inbox.

    SUBSCRIBE TODAY

    Subscribe to Tire Business

    SUBSCRIBE
    Connect with Us
    • Facebook
    • LinkedIn
    • Twitter
    • Instagram
    • RSS

    Our Mission

    Tire Business is an award-winning publication dedicated to providing the latest news, data and insights into the tire and automotive service industries.

    Reader Services
    • Staff
    • About Us
    • Site Map
    • Industry Sites
    • Order Reprints
    • Customer Service: 877-320-1716
    Partner Sites
    • Rubber News
    • European Rubber Journal
    • Automotive News
    • Plastics News
    • Urethanes Technology
    RESOURCES
    • Advertise
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Media Guide
    • Editorial Calendar
    • Classified Rates
    • Digital Edition
    • Careers
    • Ad Choices
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • BEST PLACES TO WORK
    • News
      • MID YEAR REPORT
      • TIRE MAKERS
      • HUMANITARIAN
      • COMMERCIAL TIRE
      • GOVERNMENT & LAW
      • MERGERS & ACQUISITIONS
      • OBITUARIES
      • OPINION
      • SERVICE ZONE
    • ADAS
    • Data
      • DATA STORE
    • Custom
      • SPONSORED CONTENT
    • Events
      • ASK THE EXPERT
      • LIVESTREAMS
      • WEBINARS
      • SEMA LIVESTREAMS
      • RUBBER NEWS EVENTS
    • Resources
      • ADVERTISE
      • AWARDS
        • Best Places to Work
      • CLASSIFIEDS
      • DIRECTORY
      • SHOP FLOOR
        • BALANCING
        • DEMOUNTING
        • SAFETY
        • TIRE REPAIR
        • TPMS
        • TRAINING
        • VEHICLE LIFTING
        • WHEEL TORQUE
    • DIGITAL EDITION