Employers are taking the Cadillac Tax seriously.

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The controversial provision of the Patient Protectionand Affordable Care Act will not be implemented until2018, but it already appears to be serving its purpose: Companiesare trying extra hard to reduce health spending.

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A new report from Mercer, a global human resources consultingfirm, finds that the average total health benefit cost per employeerose by 3.8 percent in 2015, the third consecutive year in whichcosts rose by less than 4 percent.

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Employers, desperate to avoid the 40 percent excise tax thatwill be levied on every dollar they spend above certain thresholdson employee health benefits ($10,200 for an individual; $27,500 fora family), are taking measures to slim down their health plans.

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The projected increase in cost for 2016 is larger--4.3percent.

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However, if employers weren’t also planning on making bigchanges to their benefits, they would see an average increase of6.3 percent. Small employers experienced a larger increase (5.9percent) compared to large employers (2.9 percent).

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Among the 2,486 employers surveyed for the report, the cost ofthe average employee health benefits package already exceeded thethreshold by $1,143.

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The survey further finds that 23 percent of large employers areat risk of hitting the threshold for the Cadillac Tax in 2018 ifthey don’t make any changes to their plans.

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That’s down from 33 percent figure it projected last year,evidence that companies are taking measures to pare down costs.

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The percentage of companies projected to be hit with the taxrises to 45 percent in 2022.

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However, since the tax is indexed to inflation, it’s not clearwhether the number of companies hitting the threshold that is ineffect at that point could be higher or lower.

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“Employers are moving on several fronts to hold down health costgrowth,” said Julio A. Portalatin, CEO of Mercer. “In the bestscenarios, they’re addressing workforce health, restructuringprovider reimbursement to reward value, and putting the consumerfront and center by providing more options and more support. Inother cases, the pressure to avoid the excise tax is leading tosome cost-shifting, plain and simple.”

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What are the popular forms of cost-shiftings?

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1. High deductible and consumer-driven healthplans

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High deductible and CDHPs are anobvious candidate. Mercer reports that among the nation’s largestemployers (those with more than 20,000 employees), 77 percent offera CDHP plan, which 30 percent of their employees opt for. Overall,25 percent of U.S. workers are enrolled in CDHP plans.

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2. Telemedicine

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Another cost-savings strategy that is sure to grow in comingyears is telemedicine.

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Although the lack of clear payment methods has kept some doctorsfrom engaging with patients through new mediums, such as videoconsultations, large employers are putting their leverage on behalfof the burgeoning market.

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The survey showed that telehealth offerings from large companiesjumped from 18 percent to 30 percent in the past year.

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3. Health care shopping tools

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Finally, the increasing availability of health care shoppingtools allows consumers to pick plans that more directly fit theirneeds and offers employers an opportunity to reduce costs.

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A quarter of large employers contracted with vendors to providetransparency tools to help employees select health plans in 2015,up from 15 percent last year.

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Read: How and why brokers are reinventingthemselves

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