Biz taking wait-and-see approach on ObamaCare tax repeal


Businesses are holding off on some changes to minimize the effect of ObamaCare’s “Cadillac tax” to see if congressional repeal efforts are successful, according to a new survey. 

{mosads}The survey from the National Business Group on Health, which represents large businesses including Coca-Cola, Boeing and General Motors, looks at ObamaCare’s 40 percent tax on high-cost health insurance plans. 

The tax, which takes effect in 2018, is intended to help slow the rise in healthcare spending by discouraging costly Cadillac plans and making consumers more conscious of their spending. 

But there is also broad opposition from businesses, which don’t want the extra tax, and unions, which object to healthcare costs being passed on to workers. Some Democrats in Congress have joined Republicans in looking to repeal the tax as well. 

The prospect of congressional action is leading some businesses to hold off making changes to their health plans, the survey finds. 

The percentage of businesses replacing their plans with high-deductible “consumer-directed health plans,” which shift more costs to consumers, remained about the same, at 33 percent, despite the impending  tax. Shifting to those plans could allow businesses to avoid being hit by as much of the tax. 

“We expected to see more employers would move to full replacement plans next year but it appears many are taking a “wait and see” approach if congressional efforts to repeal the excise tax are successful,” the report states. “If those efforts don’t materialize, we anticipate more employers will adopt a full replacement strategy in the coming years.”

Legislation to repeal the tax from Rep. Joe Courtney (D-Conn.) has 118 Democratic co-sponsors. 

Democratic presidential front-runner Hillary Clinton has also shown a desire to revisit the tax as one of the fixes she wants to ObamaCare.

“One area of the ACA that I am examining is the so-called “Cadillac” tax,” she wrote on an American Federation of Teachers questionnaire this year. “As currently structured, I worry that it may create an incentive to substantially lower the value of the benefits package and shift more and more costs to consumers.”

However, one obstacle to repeal the tax is that abolishing it would cost an estimated $87 billion over 10 years. 

The business survey found that employers expect their healthcare costs to continue to grow at a rate of 5 percent next year. The report noted that the tax is tied to inflation, which is expected to grow at just 2.4 percent, meaning that more plans could be hit by the tax. 

If no actions are taken, the survey found, health plans with the highest enrollment at 51 percent of businesses will be hit subject to the tax by 2020.

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