By Jerry Geisel, Crain News Service
WASHINGTON (Oct. 17, 2014) — Forty percent of employers say they expect at least one of their healthcare plans to be affected by a healthcare reform law-authorized excise tax — unless they act.
Many are already taking steps to reduce the likelihood that they will be hit by the tax, according to a new survey.
Under the Patient Protection and Affordable Care Act (ACA), a 40 percent excise tax, starting in 2018, will be assessed on group healthcare premiums that exceed $10,200 for single coverage and $27,500 for family coverage.
In the case of fully-insured plans, the tax will be paid by insurers, while third-party claims administrators (TPAs) will pay the tax for self-insured employers. Insurers and TPAs are expected to seek reimbursement from employers.
An Aon Hewitt survey released Oct. 16 said among employers that have determined the cost impact of the ACA excise tax, 62 percent say they are making — effective next year — significant changes to their health plans.
For example, one third are reducing how much their plans will cover, resulting in lower plan costs, but also boosting out-of-pocket expenses for plan participants.
In addition, 31 percent are increasing the use of wellness incentives. To the extent, for example, that medical problems are spotted early on by giving employees incentives to have certain tests, such as tests for high blood pressure or high cholesterol levels, the likelihood of much more expensive to treat medical complications developing later on can be reduced.
In addition, 14 percent of employers are now evaluating private healthcare exchanges, while 14 percent are reducing spousal eligibility for coverage or adding surcharges for spousal coverage.
“While the excise tax provision of the Affordable Care Act doesn't go into effect until 2018, it is accelerating the pace of change for U.S. employers,” Jim Winkler, Aon Hewitt chief innovation officer for health and benefits in Norwalk, Conn., said in a statement.
“Over the next few years, employers expect to use both traditional and innovative tactics to make substantive changes to their health plans to minimize their exposure to the tax and put them on a path to lower rates of healthcare cost increases,” Mr. Winkler added.
The survey is based on the responses of 317 employers.
This report appeared on the website of Crain's Business Insurance magazine, a Chicago-based sister publication of Tire Business.