Northampton County’s health care plan has been labeled a “Cadillac” plan that will penalize the county with taxes ranging from $934,000 in 2018 to $28 million by 2020, unless changes are made.
Summarizing the effects of Obamacare on the county’s self-insurance plan, County Executive John Stoffa told county council Thursday night, “It’s a complicated mess.”
Stoffa said health care reform will have a “significant impact” on Northampton County’s insurance plan because it has been deemed a “Cadillac plan,” which will be subject to heavy penalties if changes are not made that comply with the terms of Obamacare.
Stoffa reflected on the effects of Obamacare after the meeting, asking “How can we be penalized for providing good health care coverage to employees?”
He summed up his feelings, saying, “It’s a bloody mess.”
Asked how many other counties will also be deemed “Cadillac” health care providers, Stoffa said probably all the counties in Pennsylvania.
Even with changes the county is making, “We’re still a Cadillac Plan,” said Patricia Siemiontkowski, director of Human Resources.
“We’ll probably have to make additional changes,” she said, adding “it will impact the budget.”
Stoffa said Blue Cross Blue Shield alerted him of the county’s status in an email.
Asked what aspects of insurance plan give it a “Cadillac” rating,
Siemiontkowski said it related to rates set by COBRA, an acronym for the Consolidated Omnibus Budget Reconciliation Act health benefit provisions in 1986 that governs continuing health coverage at group rates for people such as former employees, retirees and others.
Siemiontkowski said the county has been notified its rates exceed the COBRA rates.
The county is already budgeting for a 13 percent increase in health care costs for 2014, increases that are not tied to Obamacare.
Stoffa presented council with the proposed 2014 budget, which he said does not increase taxes. County Council will hold its first meeting on the budget Wednesday.