Remember the days when Obamacare was meant to be a way for the 30-45 million Americans with no health insurance to obtain health insurance? Good times, good times
(NY Times) Cities and towns across the country are pushing municipal unions to accept cheaper health benefits in anticipation of a component of the Affordable Care Act that will tax expensive plans starting in 2018.
The so-called Cadillac tax was inserted into the Affordable Care Act at the advice of economists who argued that expensive health insurance with the employee bearing little cost made people insensitive to the cost of care. In public employment, though, where benefits are arrived at through bargaining with powerful unions, switching to cheaper plans will not be easy.
I had to check to make sure I was actually on the NY Times website, where writer Kate Taylor best watch her back for highlighting that public unions have a dangerous, expensive, and incestuous relationship with Democrat politicians and appointees which provides more and more largess at the expense of the taxpayer. In the above case, it leads to what are considered Cadillac health insurance plans, which were supposedly only obtained by those Evil Rich People like Mitt Romney.
Cities including New York and Boston, and school districts from Westchester County, N.Y., to Orange County, Calif., are warning unions that if they cannot figure out how to rein in health care costs now, the price when the tax goes into effect will be steep, threatening raises and even jobs.
Well, that’s interesting: heavily Democrat/Liberal areas seem to be having a bit of a problem with promising too darned much to public unions.
Under the tax, plans that cost above a certain threshold in 2018 — $10,200 annually for individual plans and $27,500 for family plans, with slightly higher cutoffs for retirees and those in high-risk professions like law enforcement — will be taxed at 40 percent of their costs in excess of the limit. (The thresholds will rise with inflation after 2018.)
Those thresholds aren’t really that high. Quite often the health insurance offered by many companies can cost the company $8K-$12K per year per employee on average, which was why so many were switching to Health Savings Accounts, involving employees in sharing more of the cost, which would typically cost the employee $500-$1000 more per year, if they use the insurance.
Ninety-five percent of (NYC) city employees and 93 percent of retirees are in the two largest plans, which require employees to pay nothing toward their premiums. According to the Kaiser Family Foundation survey, the average contribution by public employees throughout the country is 12 percent for individual plans and 23 percent for family plans.
Maybe the definition of “Cadillac Plans” should be changed to note how much employees pay into a plan and what it offers. NYC, Boston, and many others are expected to see their plans hit the Cadillac threshold by 2018, and so far the unions are unwilling to make any accommodations, meaning either more costs will be passed on to the union employees (yeah, right) or to the taxpayer (most likely).
One thing that may happen is to push all employees, or at least new employees, into the Exchanges, meaning more and more people will be paying to subsidize public sector unions.
Crossed at Right Wing News and Stop The ACLU.
Unionized municipal employees you mean those lazy cops and firemen ?
john, why do you hate cops and firemen? oohhh.. because those are the ones that protect women and children and minorities from your wrath, that’s why.
Wait, so adding a 40% tax on top of what it costs to have a so-called “cadillac plan” will allow for decreasing costs of paying for medical care?
Wait… increasing costs to consumers decreases costs to consumers? Did I read that right?
And, why should I have to increase my costs to care for my family just because some union got a sweetheart deal from a city or fed agency? If they don’t want to continue to give freebie health insurance, that’s their problem, not mine. Let them take that up with their own people. Don’t make me pay more because you don’t want your people rioting on you.
arsewipes.