Healthcare and Benefits

Healthcare and Benefits

ASAE supports quality, affordable, accessible health care for all Americans. ASAE supports national uniform standards for funding benefits and employee protections. ASAE further believes that association health care plans possess many years of proven experience in the delivery of benefits through purchasing coalitions. As such, association health care plans can lead the way to the reform goals of providing the efficient delivery of quality health care to more citizens.– ASAE Board Approved Position Statement #6

Cadillac Tax

An issue of concern to the association community is the so-called Cadillac tax, a 40 percent nondeductible excise tax on high-cost health plans that was set to go into effect in 2018. The omnibus spending bill passed by Congress in December 2015 delayed implementation of the tax for two years. Postponing the start of the Cadillac tax from 2018 to 2020 should lessen the incentive for employers to make changes now to their benefit plans and give opponents additional time to repeal the tax altogether. The tax is projected to raise $87 billion over the next 10 years.

Under the Affordable Care Act, both fully insured and self-funded employer health plans will be assessed the tax on the dollar amount of any employee premiums that exceed annual limits of $10,200 for individual coverage and $27,500 for family coverage. While stand-alone dental and vision plans are excluded from the cost limits triggering the tax, the law includes several other costs paid by employers and employees, such as contributions to flexible spending accounts or health savings accounts.

Dislike of the Cadillac tax has become pervasive among Republican and Democratic lawmakers alike, as it would likely result in a reduction of benefits for millions of Americans. ASAE filed two sets of comments with the IRS in 2015, suggesting that employers will look to make changes to their benefit plans to avoid the tax. These changes will reduce benefits and transfer the cost of insurance to employees through increased deductibles, reduced covered services, use of private exchanges, and the reduction or elimination of flexible spending accounts, ASAE argued.

The Obama administration’s FY17 budget included a proposal to modify the Cadillac tax to account for regional differences in healthcare costs.

ASAE is closely following congressional Republicans' plan to repeal and replace the Affordable Care Act this session. ASAE takes no position on ACA repeal but supports quality, affordable, accessible healthcare for all Americans. ASAE also supports legislation to strengthen association health plans, which has been introduced in this Congress as a piece of House Republicans’ replacement strategy.