The Truven Health Blog

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By Truven Staff

The Time is Now for Employers to Minimize Their “Cadillac” Tax Exposure

Chris Justice imageAlthough the employer mandate included in the Patient Protection and Affordable Care Act (PPACA) has been delayed until January 1, 2015, there isn’t time for employers to take a breather. In fact, employers need to use this time to put their PPACA impact analysis and planning into high gear.

In a newly released insights brief from Truven Health Analytics, The Time is Now: Immediate Actions for Employers Around Health Reform, we provide some key insights into what employers should be doing this year. One of the most important is to minimize exposure to the 40 percent “Cadillac” excise tax.

Most of us know that employers with self-funded arrangements will pay the tax on their high-cost plans; carriers will pay the tax on insured plans, presumably passing on costs in the form of higher premiums. Employers need to understand what cost-trend rates they need to maintain to minimize or avoid exposure to the tax. In addition, they will need to consider the impact of high-deductible and consumer-driven health plan designs on population health and health risk.

This means that organizations should be focused today on creating comprehensive healthcare cost projections using various trend and plan design assumptions to inform decisions on cost control measures and cost sharing approaches. Modeling “what-if” plans can help employers assess the viability of different benefit plan and premium contribution scenarios, including high-deductible and consumer-driven health plan designs.

Other items on the smart employer’s to-do list right now should be: determining if their plans meet the minimum value and affordability requirements, assessing the impact of the Patient-Centered Outcomes Research Trust Fund and Transitional Reinsurance fees, and determining the financial impact of exchange migration.

Download our recent insights brief, The Time is Now: Immediate Actions for Employers Around Health Reform.

Chris Justice
Senior Director, Practice Leadership
3385
Categories: Employer

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