a 40% excise tax will be imposed on plans with premiums exceeding $10,200 for individuals or $27,500 for a family (not including vision and dental benefits). These are the dreaded Cadillac Plans, which usually seem more like Pinto plans to those who are in them. Ironically, the so-called "Affordable" Health Care Act is not so affordable after all. Manufacturers have recently asked the IRS for an interpretation. They are working on a repeal of this tax because it just increases costs for everyone, but in the meantime, they need to start planning now. In the private sector, 81% of employers are making "moderate to significant" changes now. George Washington University just announced plans to trade in their Cadillac.
Does this plan apply to public sector workers like Northampton County employees? You betcha'. According to Governing, public sector employers have three equally lousy choices to deal with an excise tax that will cost Northampton County $9.3 million in 2018 and move up to $60 million by 2023. "They can cut employees’ health plans so they fall below the Cadillac threshold; pass the tax cost on to workers; or eat the tax themselves and make other budget cuts."
County workers work for less money than the private sector because the benefits are good. What happens if that changes?
Northampton County health care plan administrators believe Northampton County is offering a Cadillac. Controller Steve Barron said it's a Pinto, but backtracked when pressured by Glenn Geissinger. Chris Moakley, a former County HR worker with all kinds of degrees and accolades, says it's a good plan, but not a Cadillac (plan as defined by the ACA). Neither of those two will be paying the $9.3 million tax if they're wrong.
This question has to be answered conclusively.
If it is a Cadillac plan, the employees plans will have to be cut. But the County should make up for that by increasing wages. And taxes.
Hope I learn more about what is happening today. John Brown's news conference, originally scheduled for 8 am, will be at 2:30 pm.