Is The ACA To Blame For Boeing Shifting Health Costs To Employees?

Boeing is now walking back claims that it’s changing its health care plan in response to the Affordable Care Act, telling reporters that it was considering altering its plans before reform became law. Late last week, the company had written a letter to employees blaming “the newly enacted health care reform legislation” — specifically the excise tax on high cost plans that does not go into effect until 2018 — [for] adding cost pressure.” The company told its nonunion employees they will pay a 10 percent coinsurance and higher deductibles next year, attributing the changes to competition, rising costs in health care, and some provisions from the Affordable Care Act.

But yesterday, a Boeing spokeswoman said: “Yes, we are making health care changes. If you would’ve asked me if we would’ve made these changes without the enactment of the law, I would’ve said yes“:

“We’re just out of line with market. We’ve been contemplating what can we do to reduce costs,” Forte said. “It came down to, we’ve got to pass some of these costs down to our employees.”

Forte said Boeing was “keeping an eye” on the new health care law, which in 2018 would impose a significant tax on “Cadillac” health plans in 2018. However she said the federal changes were not the main reasons for Boeing’s move.

Indeed, Boeing has continued to offer a comparatively generous insurance plan since 1999. For instance, the average paycheck contribution for Boeing employees for health care is $13 per month per individual and $39 per month per family, while employees at similar companies pay $60 per individual and $210 per family.

Secretary of Health and Human Services Kathleen Sebelius echoed the sentiment during a news conference this afternoon, saying that “a number of companies and my guess is employers will cite this bill with some specificity for whatever premium increase they are suggesting. But since the first of the consumer protections became effective, less than a month ago and since the trend of lines of health insurance plans cost increases have been building over time, year after year, I think that…until there is some underling data to make that connection, it’s kind of hard to justify the kind of rate increase or a massive cost shift based on a new law. ”

By 2018 some companies offering benefits beyond threshold of the new excise tax will have to start offering less generous benefits if they want to avoid paying the new fee. But reformers believe that before then, companies and employees will be able to switch into cheaper, but still comprehensive insurance plans, thus reducing overall health care spending.