Coalition urges Congress: Address potential cuts in vision and dental plans

A coalition of dental and vision organizations, along with other groups in the benefits industry, called on Congress this week to substantially modify the proposed excise tax on health benefits--a provision, which the groups say would compel employers to eliminate or reduce coverage in order to dodge the tax.

Groups---including the American Dental Association, American Benefits Council and Communications Workers of America--say the excise tax strays from Congress' goal to bolster primary and prevention-oriented care.

"[It's] the opposite of health care reform," said American Dental Association President Ron Tankersley, DDS, in a released statement. "It would compel many employers to drop critical dental and other coverage to avoid the tax. It dismantles exactly the type of preventive, primary care that everyone agrees this country needs more of."

In a letter sent Monday, the coalition stated to Congress that many employer-sponsored plans will exceed the excise tax threshold (as outlined in the Senate's bill) because the plans "include many older workers or retirees with higher cost health care needs, or are concentrated in locations with high health costs."

For example, the letter continues, "the standard option BCBS Federal Employees Health Benefit plan, a basic plan that covers 3.8 million Americans today, will exceed the PPACA excise threshold in the first year of the tax (2013) for single coverage and in the third year of the tax (2016) for family coverage (CWA Report, 12/8/2009).

"As a result, the excise tax could lead many employers to reduce benefits (Mercer Survey, 12/2/2009) by eliminating limited service supplemental benefits and FSAs that fund much needed and prevention-oriented dental and vision care in order to avoid the tax. Cuts in these crucial benefits will lead to a decline in access to necessary care. Patients rely on the preventive services covered by the dental, vision and limited service supplemental plans to prevent infections, slow the progress of chronic disease and facilitate early treatment of preventable conditions."

James A. Klein, president of the American Benefits Council commented that the health care debate has never focused on dental, vision and other supplemental benefits.

"Those valuable benefits have only been included in the calculation of the excise tax to raise revenue. Several modifications are needed to improve the excise tax provision, including not applying the tax to these important supplemental benefits," Klein said in a statement.

Without replacing the excise tax with another funding source, the coalition has recommended three solutions to mitigate impending threats to patient care:

  1. Excluding FSAs, as well as managed and limited service dental, vision and stand-alone plans from the calculation of health plan costs;
  2. Raising the threshold AND indexing the threshold to medical inflation;
  3. Replacing the single and family coverage thresholds with a per-covered-person threshold, a fairer approach to plan cost allocation.

(The aforementioned coalition includes the following organizations: The American Dental Association (ADA), American Benefits Council, and Communications Workers of America, along with the Academy of General Dentistry, American College of Prosthodontists, American Academy of Pediatric Dentistry, American Association of Oral and Maxillofacial Surgeons, American Association of Orthodontists, Guardian Life Insurance of America, Hispanic Dental Association, Service Employees International Union, National Association of Vision Care Plans, and VSP Vision Care.)

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