Posted by Kromey at 8:23pm Jun 15 '10Remember I pointed out that what qualified as "good enough" insurance to avoid the fine -- er, excuse me, the "tax" -- would be up to the whims of one person?
Well, on a similar vein, it turns out the definition of "Cadillac plan" has no basis in reality. The University of Alaska offers a pretty nice set of insurance plans to its employees; the "Economy Plan", which offers pretty much anything the vast majority of people would need, costs a mere $240/year to the employee and a more-than-reasonable $500 deductible. Everyone I know who works at the University is very happy with the insurance plan; while I was still a dependent and my dad worked there, our whole family was also very happy with the insurance the University gave us.
But the thing is that the University's plans are now labeled "Cadillac plans" and subject to the special 40% tax. Who's naive enough to think the employees won't see a similar rate hike to at least partially cover that? UA HR isn't.
See, the University self-insures. While their plans are administered by Premera, the entirety of the insurance pool is provided by the University. As a result, the total "cost" to the University per employee well exceeds the threshold for a "Cadillac plan", subjecting this institution to this 40% excise tax. I guarantee you that this will have an effect on the employees who receive no special benefits that others cannot also receive, no special treatment whatsoever, just average, hard-working Americans who are having this ill-conceived piece of ObamaCare foisted onto them.
Of course, this is no surprise to the folks who actually know what they're talking about:
Well, on a similar vein, it turns out the definition of "Cadillac plan" has no basis in reality. The University of Alaska offers a pretty nice set of insurance plans to its employees; the "Economy Plan", which offers pretty much anything the vast majority of people would need, costs a mere $240/year to the employee and a more-than-reasonable $500 deductible. Everyone I know who works at the University is very happy with the insurance plan; while I was still a dependent and my dad worked there, our whole family was also very happy with the insurance the University gave us.
But the thing is that the University's plans are now labeled "Cadillac plans" and subject to the special 40% tax. Who's naive enough to think the employees won't see a similar rate hike to at least partially cover that? UA HR isn't.
See, the University self-insures. While their plans are administered by Premera, the entirety of the insurance pool is provided by the University. As a result, the total "cost" to the University per employee well exceeds the threshold for a "Cadillac plan", subjecting this institution to this 40% excise tax. I guarantee you that this will have an effect on the employees who receive no special benefits that others cannot also receive, no special treatment whatsoever, just average, hard-working Americans who are having this ill-conceived piece of ObamaCare foisted onto them.
Of course, this is no surprise to the folks who actually know what they're talking about:
A study published in Health Affairs in December 2009 found that high-cost health plans do not provide unusually rich benefits to enrollees. The researchers found that only 3.7% of the variation in the cost of family coverage in employer-sponsored health plans is attributable to differences in the actuarial value of benefits. Only 6.1% of the variation is attributable to the combination of benefit design and plan type (e.g., PPO, HMO, etc.). The employer's industry and regional variations in health care cost explain part of the variation, but most is unexplained. The researchers conclude "...that analysts should not equate high-cost plans with Cadillac plans, but that in fact other factors--industry and cost of medical inputs--are as important in predicting whether a plan is a high-cost plan. Without appropriate adjustments, a simple cap may exacerbate rather than ameliorate current inequities." [Emphasis added]Jon Gabel, Jeremy Pickreign, Roland McDevitt, and Thomas Briggs, "Taxing Cadillac Health Plans May Produce Chevy Results," Health Affairs, web exclusive, Published online December 3, 2009, doi:10.1377/hlthaff.2008.0430
And on "Cadillac plans": - Kromey