CHARLESTON, W.Va. -- Cutting benefits to part time workers may save CAMC money but it's unlikely to change the amount the hospital pays in "Cadillac" tax, those familiar with that provision of the Affordable Care Act, said.
Earlier this week, Charleston Area Medical Center announced it would cut back health benefits for its part-time workers.
Starting in 2014, those who work 20-23 hours a week will no longer be eligible for health coverage. In 2015, employees must work at least 30 hours to be eligible for health care. Workers who are able to do so were encouraged to work more hours to regain the health benefits.
CAMC said the cuts were due to a part of the Affordable Care Act requiring companies to pay a 40 percent excise tax on the amount that employee health plans exceed $10,200 for an individual or $27,500 for a family. The so-called "Cadillac tax" on the most generous health plans goes into effect beginning in 2018.
CAMC spokesman Dale Witte said the amount the hospital pays towards an employee's health care would be above that amount. The hospital will make incremental changes over the next four years before the tax takes effect.
"There are other requirements for health-care reform that will take effect between now and then that also have cost implications," Witte wrote in an email to the Gazette.
Perry Bryant, the executive director of West Virginians for Affordable Health Care, said he was perplexed by CAMC's reasoning.
"I don't know how dropping part time workers helps them at all, I just don't understand that," Bryant said. "How that could help you reduce the average cost of the health care plan?"
Bryant he was surprised that CAMC's plans were so expensive they would be affected by the Cadillac tax at all.
"I'm stunned that CAMC offered plans that were that rich," Bryant said. "I would like to see the hospital's benefit structure. That's double the cost of a typical Blue Cross Blue Shield plan."
Witte said the hospital would not publicly announce further details about employee insurance plans.
Dr. Dan Foster, a CAMC physician and former state legislator, was also surprised that CAMC's plans would be affected.
"I'm surprised the policies we had were that rich," Foster said. "I realize it's a self-insured plan and the calculations may be different."
Brandon Merritt, a health policy analyst for West Virginia Center on Budget and Policy, called the hospital's move "a business decision" that's altogether separate from the issue of the Cadillac tax.
"I'd be interested to know what CAMC plans to do with the savings from this move and whether or not they intend to pass along at least a portion of those savings to the part-time workers to help them pay for insurance on their own," Merritt said. "Hopefully they don't plan to pocket it all themselves."
CAMC isn't the only company to drop health care benefits to part time workers in reaction to the Affordable Care Act.
Retailer Trader Joe's, dropped health benefits to part time workers and contributed some of the money it saved to a stipend that employee's can use to buy a health care on the health insurance marketplace.
Employees might actually get a better deal on health coverage on the health insurance marketplace. That depends on the employee's financial situation.