This from the American Benefits Council.
As you can see, the highest cost plans (union plans and state worker plans) are exempt from the tax for eight years. The question now is how will the lost revenue be recouped and from whom.
Excise Tax on High-Cost Plans
Lawmakers have reached a tentative agreement on the so-called “Cadillac” excise tax on high-cost health plans.
Reports thus far indicate that:
The tax thresholds would be raised to $24,000 for family coverage (from the current proposed $23,000) and $8,900 for individual coverage (from the current proposed $8,500). These amounts would be effective in 2013.
Thresholds would remain indexed to inflation plus one percent, beginning in 2014.
Thresholds could be increased if gender and/or age demographics for a plan are greater than “average,” which is currently undefined.
The higher thresholds for certain high-risk occupations would remain as currently included in the Senate bill.
The thresholds would be adjusted for 17 high-cost states – 120 percent for 2013, 110 percent for 2014 and 105 percent for 2015.The Secretary of Health and Human Services (HHS) could adjust the limits upward if health cost trends exceed expected levels between 2010 and 2013. HHS would use the premium cost increase for the federal employee standard option as a benchmark.
Three employee groups would be exempt from these thresholds until January 1, 2018: collectively bargained plans, state and local workers and voluntary employee beneficiary associations (VEBAs). These plans would also be permitted to participate in health insurance exchanges starting in 2017.
Dental and vision plans would be excluded for purposes of the excise tax beginning in 2015, but would be included for 2013 and 2014 for revenue purposes.
Flexible spending account amounts would still apply to the tax thresholds.
A link to the ABC website can be found on the right side of this website.
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