Important practical info on so-called "Cadillac" plans.

[inna]

Here's a very important piece of info that most people are not aware of:


*** The tax would be paid beginning in 2013 on 40% of the amount by which your health care benefits exceed $8,500 for individual or $23,000 for family coverage in the year 2013.


*** What exactly counts toward that amount of $8,500 for individual or $23,000 for family?

Shockingly, it's COMBINED benefits that will count toward that amount, i.e.:

* Both employer and employee premium shares
* Any additional dental and vision premiums, and
* Any amount in a flexible spending account

*********************

I just did a quick calculation on my current (adequate but not by any stretch of imagination "Cadillac") insurance plan offered via University of California, and this standard, very average plan already is close to $8,500, when everything is taken into account. I have no doubt that plans like these will exceed $8,500 in 3 years, given the cost inflation. In other words, this tax plan absolutely without a doubt targets middle class.

[dkf]

1. Flexible spending account?

That totally sucks! That is not right.

Insurance cos won't pay for your flexible spending account tax. That will be you. Flex accts won't make sense anymore since you put it in your flex to save on tax rates lower than 40%

[still_one]

2. Please provide a link /nt

[dkf]

4. Found one

http://www.slate.com/id/2232434/


How do I know if my insurance plan is a "Cadillac plan"? Look at the cost. The finance committee defines high-cost or "Cadillac" as any plan with premiums higher than $8,000 for individuals or $21,000 for families. Keep in mind that these figures include everything you and your employer spend on health care except for the deductible: premiums for medical (the portions paid by you and by your employer), dental, and vision coverage, as well as any money you put into a flexible spending account, which allows you to set aside pretax money to cover medical costs. Since your pay stub may show only your personal contribution—not that of your employer—the best way to find out the total cost of your plan is to ask your human resources liaison. Many companies already list their employees' total premiums on their W-2 tax forms. The bill passed by the finance committee would make that mandatory.

[still_one]

8. Thanks /nt

[FrenchieCat]

11. That's old. The figures are $23,000 on a family of 4, $26,000 if over 55 or working in a harzadous

field.

For individuals it is 8,500 or $9,750 if over 55.

The tax is on anything ABOVE.....

Most folks who have cadillac plans do not have a Flexible spending account....
because the Cadillac plan takes care of most of everything.

An average plan costs worker AND employer combined about $13,750 per year for a family of 4.
So the $23,000 is nearly double, BEFORE anything would be taxed....
and the tax is paid by the insurer, and is not automatically passed on (work needed there, certainly).

There is a reason that this tax is quoted as affecting approx 2-4% of the population.

And of course, my understanding is that this tax starts in 2015, not 2013 (although I could be wrong).

not more than 21% of union household have plans that are higher than the average $13,750......although I can't find the figure of how many are above $23,000, but it is a relatively small percentage, like maybe 10%....most who have it are older and have pre-existing conditions...but my understanding is that pre-existing condition will not longer rate at 11/1 in premium cost, but will be relegated to 3/1 or 2/1 depending on which the conference folks adopt.

Dental/vision plans run in the neigborhood of an addition $1,000-1,500 per family household per year.

[dkf]

15. The figure may be wrong but it sounds like the components of what is included are the same.

And that is the big concern.

[FrenchieCat]

18. Elaborate please.

Here's more information:

There is a reason why those with a Cadillac plan are not the same people who would invest in a Flexible Spending account plan which is more of an alternative, not a companion to the cadillac plan.......

Flexible spending accounts
Health care flexible spending accounts are employer-established benefit plans that reimburse employees for specified medical expenses as they are incurred. These accounts are allowed under section 125 of the Internal Revenue Code and are also referred to as "cafeteria plans" or "125 plans." The employee contributes funds to the account through a salary reduction agreement and is able to withdraw the funds set aside to pay for medical bills. The salary reduction agreement means that any funds set aside in a flexible spending account escape both income tax and Social Security tax. Employers may contribute to these accounts as well.

There is no statutory limit on the amount of money that can be contributed to health care flexible spending accounts. However, some companies place a limit of $2,000 to $3,000 on flexible spending accounts. Once the amount of contribution has been designated during the open enrollment period that occurs once each year, the employee is not allowed to change the amount or drop out of the plan during the year unless he or she experiences a change of family status. By law, the employee forfeits any unspent funds in the account at the end of the year. There have been proposals introduced in Congress to ease this "use it or lose it" rule by allowing up to $500 to be carried over to the next year; such proposals have not been enacted.
http://www.bls.gov/opub/cwc/cm20031022ar01p1.htm


Dental/Vision care insurance
costs as little as $100 per year, and up to $1,200 per year for a family (cadillac dental care),
depending on the plan.
http://www.consumerbenefits.net/dental-plans.htm

[dkf]

19. You can use flex plans to pay for things like LASIK

Which costs around five grand or when you know you have high Rx bills or for a crown or other procedure they charge an arm and a leg for.

I wanted to see the longer term effects first but I guess I better hurry. And you have no idea how many problems I have with my contacts. I can't go out for a walk without some dirt flying in my gas perm lenses. Ive driven with only one contact more often than you would like to know and I know I'm a hazard on the road when I do that.

[laughingliberal]

22. My belief is a high percentage of those over 50 have premiums in this range

Mine to cover my husband were almost that high in 2004 and I'm sure that carrier has gone up since then as most have. I also have friends who are in their 50's paying $2000 per month (a couple) for pretty basic medical coverage. With the premium costs continuing to increase and little to stop them these taxes will fall on more and more middle class families in a few years. Just as the AMT would now fall on them if Congress didn't go in and 'fix' it every year instead of changing it once and for all.

[AllyCat]

20. Our plan is the middle of the road plan offered by my employer

Total cost for our family plan is about $16K a year. With inflation and price gouging in 3 years, I'm sure it will be well into that range. With what we put away in flex spending and dental + vision, we will be right in that range. These Congressional types have not one iota of a clue what Americans are going through. Not one iota.

[virgogal]

5. Ditto.

[inna]

7. Just now, I used this link (from which a part of my post was copied-and-pasted):

http://www.seiu.org/2009/12/qa-on-the-senates-excise-tax-on-high-cost-so-called-cadillac-health-insurance.php


But this info is readily available elsewhere. Try Kaiser website, they have fairly comprehensive analysis/summaries of the current bill(s). I don't have time right now to look for another link, but I'll might do it later tonight when I get home from work.

[still_one]

9. That is OK, thanks /nt

[dkf]

13. Someone left this comment on the seiu site

BROKERSWAP | DECEMBER 20, 2009 1:52 PM | REPLY
I have 63 SEIU members that work for me, and I will be passing on all healthcare increases to them in the future through lower 401k match or pay cuts.

[dkf]

3. Someone in unrecommending because they don't want anyone to know.

You can run but you can't hide.

[TornadoTN]

6. Gotta love the "True Believers"

I'm not sure if they are just sucked into the cult mentality, are paid operatives, or are just plain in denial about the whole thing.

[stray cat]

10. In other words - if you want a decent plan expect to pay more than 8000 per year

that is the real cost of health care. Expecting to pay less than that is naive

[FrenchieCat]

14. I'm self employed. An "average decent plan" costs us $14,000 per year....

that is with us paying everything, since we don't have an employer.

Folks who have employers footing most of the bill, still don't have total policy premium valued at much more than $13,650.

[Edweird]

17. Bullshit. We spend more than any other country and get less.

And now it's getting MORE EXPENSIVE.
http://www.nationmaster.com/graph/hea_spe_per_per-health-spending-per-person

[skorpo]

12. Looks my husband and I won't be affected...

because we'll both be on Medicare with a supplement policy by then.

[dkf]

16. Yeah you have to escape the employer based system to be safe

[dkf]

21. I'm not sure how much my employer pays.

I have no idea if I have a Cadillac plan or not.

[inna]

23. You can request this info from Human Resources,

or you may already have it available if you get monthly earnings statements from your employer.

I had no idea how much the combined costs were either, until I actually 'bothered' to look at the "Contributions" section.


And I mean, I'm enormously grateful for having my insurance being provided by my employer, but...

The harm this bill will do thanks to the excise tax on employer-provided insurance benefits is enormous. The health care bill is designed with the goal of making millions of middle class Americans’ health insurance coverage much worse. That is not a bug, it is a feature.

The excise tax is meant to force your employer to cut back your insurance benefits, reduce your coverage, and increase your co-pays and deductibles. This is not the conclusion of partisan think tanks, bloggers, or activists, this is the conclusion of the non-partisan Congressional Budget Office (CBO) and the Center for Medicare and Medicaid Services (CMS). They CBO concluded:

-snip-

To translate, they both conclude the tax will effectively force employers to scale back the health insurance benefits they offer in order to avoid the excise tax. This can be done by reducing what benefits the plan covers and/or increasing cost sharing (i.e. higher co-pays, higher deductibles, higher out-of-pocket limits, and possibly lower annual limits). If you have a good employer provided health insurance plan, it will be dramatically scaled back. Contrary to Obama’s direct promise, you will not be able to keep the coverage you currently have, and that is by design.

The real problem with this excise tax on what are dubbed “Cadillac” plans is that it is not indexed to health care inflation. In the first few years, it will only affect high-end plans, but, after a decade, it would force employers to make the vast majority of employer-provided health insurance plans much worse. A decade after reform starts most Americans will have much worse health insurance coverage as a result.

Instead of paying for reform with a tax on the richest one percent of Americans, like the House bill, the Senate bill pays for reform by worsening the insurance coverage for the vast majority of Americans. Ruining the coverage of most working class Americans to get the money for a huge corporate boondoggle that will only enrich the insurance companies while not stopping medical bankruptcy in this country does not sound like a good trade.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=7338574&mesg_id=7339021

[Nikki Stone1]

24. Thank you for researching this.

K & R

[inna]

25. Gay couples will be taxed at the $8,500 because they are not recognized as families

Gay couples will be taxed at the $8,500 because they are not recognized as families

LGBTs get FRAK again by the Obama Administration!


http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=7416592&mesg_id=7417763


(important and often overlooked point)