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How Changes in Employer-Sponsored Health Coverage May Affect You

Health care has undergone major changes and is expected to impact both employers and employees in the coming years. The health care overhaul will cause a 40% tax on the value of employer-sponsored coverage that costs more than $10,200 for single plans, and $27,500 for family insurance, starting 2018.

health-insurance-and-your-taxesTo avoid the massive 40% tax, employers are expected to make changes. It might mean making adjustments to benefits for employees.

The impact of this change may be felt as early as this fall, as that is the time when employees often change their coverage for the next year. The Dallas Morning News shares:

“Benefits consultant Mercer found that more than half of the roughly 1,200 employers who responded to its survey expect to make some changes to coverage in 2016.

“Here’s how your employer might react to this tax and, in some cases, how it may affect your coverage:

“1. ENCOURAGE HEALTHY LIVING

“The push by employers to make employees healthier may get stronger in 2016 and beyond.

“Mercer’s survey found that 42 percent of employers were considering adding or expanding programs to improve employee health, specifically to avoid the excise tax.

“These programs often start with a health risk assessment and coaching to help employees improve their well-being. That might include help for those who want to quit smoking, eat better or manage chronic conditions like diabetes.

“Companies have become more aggressive with this approach in recent years by levying surcharges or added costs on employees who smoke or don’t take a health risk assessment.

“Employers want workers to take better care of their health with the hope that this wards off future medical expenses. Simply put, a worker who manages his diabetes or improves cholesterol levels may prevent a heart attack.

“2. ADJUST COVERAGE

“If your spouse can get coverage through his or her job, expect your employer to encourage this. More companies are adding surcharges to the cost of coverage for spouses who have other options.

“Companies also have been raising deductibles, or the amount a person has to pay before most insurance coverage begins. This lowers the premium or cost of coverage. It also can encourage patients to shop for better prices on some forms of care. Companies are offering some help with these high deductibles.

“A quarter of employers surveyed by Mercer say they are considering adding a consumer-directed health plan to the coverage choices they offer or working to increase enrollment in one to help avoid the tax. That’s in addition to the 41 percent that have already done this.

“These plans pair coverage that has a deductible topping $1,200 with an account that lets the employer or worker save for medical expenses.

“Some businesses also may cut back on their use of flexible spending accounts, which can give workers who don’t have a consumer-directed health plan a chance to set aside money before taxes for out-of-pocket health care costs.”