BROKERAGE BRIEF I N S U R A N C E President Obama Delays “Cadillac Tax” The Cadillac Tax is a 40% excise tax on high-cost employer sponsored health plans, which is part of the Affordable Care Act (ACA). President Obama has delayed implementation of this tax from 2018 to 2020. Based on the delay, the tax is still
The additional expenses associated with the Cadillac Tax can be reduced by: • Offering employees a high-deductible health plan (HDHP). These plans have lower premiums which can help employers avoid triggering the excise tax. • Making available a Health Savings Account, which can be funded by an employer or employee. • EstablishingaHealthReimbursementAccount,whichisfundedbytheemployer.
deductible for employers who will be subject to it. The purpose of the Cadillac Tax is:
• To help finance the broadening of health coverage under the ACA. • To reduce excess healthcare spending (by employees and employers). • To prevent employers from deducting high-cost health programs as a business expense. If the cost of insuring one of your employees is over $10,200, the dealership is subject to the Cadillac Tax. For families, the threshold is $27,500. Cost includes the amount paid by the employer and the employee. (Threshold amounts will increase over time, to keep up with inflation.)
Michael W. Conway , Executive Director of the GNYADA Insurance Brokerage, is available to discuss your current and future health insurance needs. To discuss any of the topics contained in this newsletter, schedule an in-person visit at your dealership, or inquire about and other insurance issues, Michael can be reached at 718.746.8100 or email@example.com .
Medicare “Combo Plans” Can Benefit Both Employers and Employees
beyond the age of qualifying for Medicare, both them and you should be aware of this combo option. Naturally,there isnobroadbrushthatcoverseverypossiblescenarioandhealthcare need. For coverage advice, workers should be referred to a trusted professional, so they can analyze what the advantages would be under both options.
Employees who are eligible for Medicare can opt for health coverage that combines Medicare with a Medicare supplement, often called Medigap; this is a privately sold policy that helps cover copayments, coinsurance and deductibles. Not only do recipients see financial savings with this combination, they also get broader coverage. Employers likewise save money, as they’re spared the cost of insuring that employee through the company health plan. This is a win-win situation. Historically, the vast majority of people who worked past retirement age rarely opted out of their group coverage, in favor of Medicare. But the popularity of this new“combo”coverage is quickly changing the trend. In New York State, an employee 66 years of age pays the same premium as a 36-year-old employee, even though the older person has Medicare coverage paying a portion of medical/hospital claims. The ever-increasing health plan premiums, as well as significantly high deductibles, make this new form of coverage an attractive option. What should employers do? The potential benefit of this configuration of coverage depends on a few factors, including how many people you employ and whether Medicare or your company plan is the primary payer. If your dealership has employees working
Randy Frey, VP Senior Services, the FNA Group, contributed to this article.