Large employers taking steps to avoid Cadillac tax

But it’s far from clear that the steps most employers are taking are particularly meaningful. The survey found that 19 percent were trying to curtail employee contributions to flexible savings accounts and 13 percent were trying to reduce worker contributions to health savings accounts.

AHPI did not report how many employers planned to cut their own contributions to employee benefits. The organization did rely on polls done by other groups to predict that many businesses planned to shift more health costs onto their workers. A poll conducted by the National Business Group in August found that 38 percent of businesses envisioned reducing benefits. 

Depressingly for workers, AHPI’s study also found that only 16 percent of employers who plan on reducing benefits believe they will make up for the cuts with wage increases. In contrast, 71 percent say there will be no corresponding wage hike. It is this type of situation feared by unions, who have in many cases bargained for generous benefits in lieu of wages. 

AHPI did not say much in response to the main argument for the tax advanced by its supporters –– that it will save everybody money by controlling rapidly-rising health care costs. The organization dismissed the claim as unrealistic.

“Some health care policy theorists say that the excise tax will curtail health care expenditures,” stated the report. “Health care policy realists understand that solving the excise tax facing many employers as well as making changes to future payment policies are necessary to stave off a potential collapse of the employer-sponsored health insurance — a system that 175 million Americans rely on for health care.”