Friday, August 23, 2013

Healthcare Rises on CFO Priority Lists: Survey

This is from David McCann at

CFOs are far more involved in their employers’ health-care strategies than they were before the Affordable Care Act (ACA) was signed into law in 2010, new research indicates.

In a ... survey of benefits managers at 420 large and midsized employers, participants were asked to rate the extent of increased involvement by their companies’ CFOs compared to “three to five years ago.” Responses to the survey, expected to be publicly released in about a month, were on a five-point scale where one meant “not at all” and five stood for “a great extent.”

Almost half – 46% – gave the CFO a rating of five or four, while a further 29% cited a moderate degree of increased involvement. Only 7 percent said the finance chief was no more engaged in health care now than several years ago. ...

[A] ... concern for CFOs is an onerous excise tax, often called the Cadillac tax, that will be assessed starting in 2018 on employers with plans valued at more than $10,200 for individual coverage and $27,500 for family coverage. Such an employer would have to pay a tax equal to 40 percent of the so-called “excess benefit.” [This penalty is actually levied on carriers, not employers.  Carriers will, however, surely pass this on in the form of higher premium.] 

Sixty percent of survey respondents said the excise tax will have a significant or moderate influence on their health-care strategy in 2014 and 2015. After factoring in four more years of health-care cost hikes, 61% of respondents said they expect their companies to be exposed to the tax in 2018 unless they take corrective action. A company with a plan covering 10,000 employees and dependents, and that is $2,000 over both the individual and family thresholds, would incur a tax of $8 million. ...