ME pay YOUR penalty?

Would you be ok with contributing towards paying a portion of a penalty created so someone else can continue to have a much better health insurance plan than you? So far, I haven’t spoken to one person who is. I’m not comfortable with it either. Well…..that’s what the Teachers Union and our School Board Reps tried to sign you up for last March in the proposed Teachers contract. Fortunately, the Budget Committee and the voters know how to “just say no”.

Since Article 2 of the March 2019 Warrant did not pass, renegotiation for the Teachers Collective Bargaining Agreement will soon begin. Below is the language that was originally included regarding the "green" and possibly "red" health insurance plans now offered. My understanding of this is that the taxpayer was being signed up to pay half of the “excise tax” (aka penalty) created by these high cost health insurance plans. I could not vote for it back then and I will not vote “yes” next March if this language is still in the contract. The penalty will most likely not even be an issue if they agree to embrace the "yellow" health insurance plan. (see my post  http://talkingwakefield.com/health-insurance-101/  )
If there is insistence to stay with the "cadillac" plans, there may be a compromise to the original language that was included in the prior proposed contract.  Since we really don't know the full impact of this event yet, perhaps language could be included that states "we will renegotiate" if the excise tax is imposed. I got this idea from examining contracts from other towns. It will be important to make your position known to our School Board before they sign on the dotted line.

"A member who selects an offered health menu plan option other than the Green Open Access plan, such as Red Open Access Plan shall pay the difference between the cost of the selected option and the district’s share of the district provided Green Open Access plan.
In addition, starting January 1, 2022, an adjustment for a high cost plan equal to 50% of the excise tax that accrues under the Affordable Care Act (currently 26 U.S.C. § 4980I) shall be subtracted from the District’s share of the premium under this Section, and shall be added to the employee’s share of the premium under this Section. 1, 2

1 The excise tax is expected to equal 40% of the excess of the plan’s cost over $850 per month ($10,200 per year) for single coverage or over $2291.66 per month ($27,500 per year) for two-person or family coverage. The plan’s cost for purposes of this adjustment is expected to equal the aggregate premium, plus any contributions to FSAs, HRAs and HSAs. The excise tax and adjustment may change with the cost of living per 26 U.S.C. 4980I(b)(3)(C)(v) or with amendments to the Affordable Care Act.

2 Example: Assume the annual premium for the selected plan with single coverage is $11,000 and FSA contributions are $1000. The annual plan’s cost is $12,000 ($11,000 + $1000). The annual excise tax and adjustment are expected to be $720 (40% x [$12,000 - $10,200]). The District will subtract $360 ($720 x 50%) from its share of the annual premium, and the employee will add $360 to his/her share of the annual premium.  "

J.M.

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