If the Senate's proposed Patient Protection and Affordable Care Act passes the Senate, the working stiff will probably be affected. A study by Mercer finds that 63% of employers would cut the health benefits they offer in order to avoid an excise tax included in the bill.
Mercer, a division of Marsh & McLennan Companies (MMC), reveals that 25% of employers offer health insurance programs that would be "too generous" under the act, making them subject to a 40% nondeductible tax on the excess value.
Excess value is defined as benefits above $8,500 for employee-only coverage and $23,000 for families -- beginning in 2013. Retirees, workers in high-cost states and workers in high-risk jobs would have higher annual cost thresholds: $9,850 and $26,000 for individuals and families, respectively.
Twenty-three percent of the respondents to Mercer's survey say the would maintain their existing plans, but the additional costs would be passed along to their employees. Only 2% say they would keep the plan and absorb the tax for their employees. And, a mere 7% claim they would ditch the high-cost plans. Smaller employers, which usually offer only one medical plan, say they would terminate it at a response rate of 9%.
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Reader Comments (Page 1 of 1)
12-07-2009 @ 1:00PM
numerwan said...
So an employer will get penalized for giving better health insurance coverage?? Isnt that going in the opposite direction?
12-09-2009 @ 3:55PM
Alan said...
So, employers were OK with premiums going up 30% or so, but a 9% tax is out of the question?