My employer, University of Minnesota, will be charged $48 excise tax million because the government considers our healthcare plan a Cadillac plan. I’m including the email below from our vice president:
Dear UPlan Members,
Federal health care reform, known as the Affordable Care Act (ACA), will fundamentally impact the way employers provide coverage to their employees. For employers, like the University, who provide what the ACA defines as a high value plan, the ACA imposes a tax (often referred to in the media as the “Cadillac or Excise Tax”), on those employers unless changes are made to their plans. Over the past several months, the University has been working to analyze the ACA and its effect on the UPlan. It is important to understand that if left unchanged, the current cost of the UPlan would result in a $48 million excise tax on the University. This is an expense that the University simply cannot take on.
As a result, we have been consulting with advisory and employee groups to explore what specific changes should be made to the UPlan to avoid this significant tax burden. The University’s goals are to offer employees a high quality, affordable plan with choice, and minimize the impact of potential changes on those employees with serious and chronic health conditions.
After much discussion and a thorough analysis, the UPlan’s governing body recommended UPlan changes for 2014, which include:
Offering a new Accountable Care Organization (ACO) plan—a new lower cost option with a narrower network. In an ACO Plan, an employee elects to participate in one of four ACOs, with their family, for the full calendar year. The ACO then provides comprehensive health care and ongoing health support for the employee and his/her family for that year. No referrals are required within the ACO, but referrals outside the ACO are rarely permitted. In 2014, ACO options will be available in the Twin Cities, but the ACO Plan will not initially be available in other locations.
Increasing copays for primary and specialty care
Introducing a small deductible on non-copay items
Increasing out-of-pocket expenses in the HSA plan
Combining base plans
Merging two of the family cost tiers
Premium Before Obamacare:
Premium After Obamacare: