Employee Benefit News: New health care law likely to raise benefits costs
New health care law likely to raise benefits costsBy Lydell BridgefordMarch 22, 2010
While the health care legislation passed by House Democrats on Sunday expands coverage to 32 million Americans, the measure is bound to increase the costs of employer-sponsored health benefits.
With the 219-to-212 vote, the House enacted health care legislation that imposes a 40% excise tax on employers that provide high-end insurance coverage, which would take effect in 2018. Companies with health plans that have premiums of $10,200 or more for singles and $27,500 for families are subjected to the tax. The House measure also requires employers with 50 or more workers to provide affordable health insurance or pay a penalty of up to $3,000 per worker.
Government economists estimate that the new health care law comes with a price tag of $938 billion over 10 years. Employers and employee benefits analysts assert that the government will most likely raise business taxes and fees on health insurers, pharmaceutical companies and medical-device manufacturers to foot the bill.
Most corporate leaders and business owners believe that those industries will then levy the costs of the taxes and fees onto their companies, resulting in higher premiums or reduced benefits for workers.
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