Some employers may want to redesign their benefits packages to ward off a coming tax on high-cost health plans.
Analysts at Unum Group Corp., Chattanooga, Tenn. (NYSE:UNM), discuss the new 40% excise tax on high-cost health plans in a guide to the Affordable Care Act (ACA), the health system change legislation that includes the Patient Protection and Affordable Care Act (PPACA).
One ACA provision will provide tax credits for small businesses that offer health insurance, and another will put limits on how much employees cannot contribute to flexible spending accounts, the analysts say.
The 40% "Cadillac plan" excise tax is supposed to take effect in 2018 and initially apply to health benefits packages that cost more than $10,200 for single coverage and more than $27,500 for family coverage.
For the purposes of the Cadillac plan excise tax, benefits package value calculations will exempt non-medical benefits such as life insurance, disability insurance, vision insurance, dental insurance, long term care insurance and accident coverages, analysts say.
In theory, the non-medical benefits exemption could increase the appeal of non-medical insurance products - such as vision care plans that pay for eye-related medical care, and disability insurance plans that provide wellness and condition management services -- that reduce the value of medical benefits packages without reducing the total amount of services that employees get.