A study by Mercer finds 63% of employers say they would cut health benefits to avoid paying the excise tax included in the Senate’s proposed Patient Protection and Affordable Care Act.
One in 4 employers offer health coverage that would be deemed “too generous” and thus be subject to the act’s 40% non-deductible tax on the excess value, according to Mercer, an arm of Marsh & McLennan Companies Inc., New York.
In general, excess annual costs under the PPACA would be those above $8,500 for employee-only coverage or $23,000 for family coverage, starting in 2013. Higher annual cost thresholds-$9,850 and $26,000-would apply to retiree plans, coverage for certain workers in high-risk jobs and coverage in certain high-cost states.
Annual costs would include employer-paid, employee-paid, pre-tax and after-tax premium or premium-equivalent amounts for the health, dental and vision coverage. Also included would be pre-tax contributions to flexible health spending and employer contributions to health reimbursement and health savings accounts.