(Bloomberg) -- After years of passing on more and morehealth-care costs to employees, companies are slowing theiradoption of high-deductible plans next year, according to a surveyof more than 100 large U.S. employers.

|

That relief could be temporary. Companies are waiting to see iflawmakers will repeal Obamacare’s “Cadillac tax” on high-cost healthcoverage, which is a levy on individual healthpremiums greater than $10,200.

|

A roll-back would keep employers from having to shift workersinto plans where they bear more of the up-front costs of theirinsurance.

|

“Because there’s been some momentum around trying to repeal theCadillac tax, some companies are taking a wait-and- see approach,”said Brian Marcotte, president of the National Business Group onHealth, which includes companies such as Wal- Mart Stores Inc.,PepsiCo Inc. and General Motors Co. “If it’s going to go intoeffect, I think you’ll see another rush in 2017” to put workers inhigh-deductible plans, said Marcotte, whose group conducted thesurvey.

|

Opposition to the tax has unitedDemocrats and their union backers with Republicans and largecorporations. It’s tough to repeal, though, because the tax isprojected to raise $87 billion over the next decade.

|

Read: IRS seeks more input on CadillacTax

|

The tax was a key feature of 2010’s Patient Protection andAffordable Care Act, designed to pressure overall health-carecosts.

|

And since health insurance isn’t taxed as income, employers havehad an incentive to provide more health insurance, and less wages,than they otherwise would.

|

Employer tax

|

The tax is a 40 percent levy on family plans that cost more than$27,500 and individual plans with premiums above $10,200. Itapplies only to the portion of the cost that falls above thosethresholds, which is tied to inflation.

|

More than 100 House Democrats and 70 Republicans have signed onto efforts to repeal the tax, and even Democratic presidentialcandidate Hillary Clinton has signaled that she’d reexamine theprovision.

|

“There’s a sense that at some point between now and 2018, thatwe’ll try and do something to help ameliorate it,” saidRepresentative Joe Crowley, a New York Democrat.

|

Opponents say the tax raises the cost of providing healthcoverage or pushes workers into less-rich plans. Cigna Corp.,Pfizer Inc. and several union groups have joined together in alobbying group called The Alliance to Fight the 40.

|

A study released Wednesday by the National Center for HealthStatistics also shows a pause in the move toward high-deductible plans. About 36percent of people under 65 with private insurance had highdeductibles in the first three months of 2015, compared with about37 percent in 2014.

|

Overall, the center found that about 7 million people gainedinsurance in the first quarter of 2015. About 29 million people, or9.2 percent of the population, remained uninsured, down from 11.5percent in 2014.

|

|

About 33 percent of employers will offer high-deductible plansas the only option next year, just a percentage point higher thanthis year, according to the employer survey. While about six in 10workers had deductibles of less than $1,000, according to theKaiser Family Foundation, high-deductible plans carry costs of$1,300 or more.

|

Charging workers

|

To deal with health costs, companies are also charging workersto cover their spouses, trimming or restricting benefits, andadding wellness programs, according to the survey.

|

“The tax does nothing to pull down health-care expenditures, itisn’t a tax on overly generous health-care coverage,” SteveKreisberg, director of collective bargaining at the AFSCME union,said by phone. “You’re going to wind up shifting costs tohealth-plan participants.” AFSCME says it represents about 1.6million workers and retirees.

|

And the tax is not a cure for the factors that have steadilypushed up health costs in the U.S. The National Business Group onHealth predicts health-care costs for big companies will probablyrise by about 5 percent next year. Workers’ premiums will see asimilar jump, Marcotte said.

|

At risk

|

About a third of employers are at risk of paying the CadillacTax in 2018 if they don’t adjust their health benefits, accordingto Mercer, the benefits consulting unit of Marsh & McLennanCos. The proportion is projected to quickly rise above 50percent.

|

“I don’t believe that only Cadillac plans are being impacted,”said Representative Xavier Becerra, a California Democrat. He saidit’ll be difficult to come up with a replacement provision thatwill raise as much money as the tax, given the struggle over thecurrent measure and the fight it faced when the law was passed fiveyears ago.

|

“We’ll have as much trouble today as we had back in 2010,”Becerra said.

|

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.