New AHPI Study on the Cadillac Tax

The American Health Policy Institute today released their latest study on the health care excise tax, ACA Excise Tax: Cutting Family Budgets, Not Health Care Budgets, which reports a fresh analysis of employer trends in response to the excise tax. The study is based on results from the June 2015 health care survey, as well as the live survey that was conducted at WPC last month.

http://www.americanhealthpolicy.org/Content/documents/resources/AHPI_Excise_Tax_October_2015.pdf

The new surveys found that the excise tax is already having, and will continue to have, a significant impact on employers and employees alike:

•                    Almost 90 percent of large employers are taking steps to try to prevent their company from having a plan that triggers the excise tax in 2018;

•                    Over 30 percent of large employers said they would have at least one plan impacted by the excise tax in 2018;

o   Almost half of the employers that did not have plans hitting the excise tax in 2018 said they would have a plan that would be impacted by 2023;

•                    Almost 19 percent of large employers were already curtailing or eliminating employee contributions to flexible spending accounts (FSAs) in order to avoid triggering the excise tax;

•                    Almost 13 percent were already curtailing or eliminating employee contributions to health savings accounts (HSAs); and

•                    Among employers who are going to reduce the values of their plans as a result of the excise tax, 71 percent of employers said that they probably would not provide a corresponding wage increase; 16 percent said they would raise wages in response to benefit cuts.

The study was featured in Politico today:

MOST LARGE EMPLOYERS FEAR THE CADDY TAX - Two new surveys of employers, conducted by Tevi Troy's American Health Policy Institute, show that nearly 90 percent of large employers are trying to ensure they don't trigger the tax in 2018. Some 30 percent said at least one of their plans would be impacted in 2018 - and half of the remaining employers said they'd have a plan that would be affected by 2023. Over two-thirds of the employers that are going to reduce benefits because of the Cadillac tax said they wouldn't offer a corresponding wage increase."