CFOs Mindful of “Cadillac Tax” in Upcoming Union Talks

My health insurance as a retiree is through the City of Omaha. I pay a partial premium. There is a clause in the new 5 year contract settled last fall for 2013-2017 on the cadillac tax. Should the the cost of the insurance creep up near kicking in the tax, the contract is opened immediately to avoid it.

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http://blogs.wsj.com/cfo/2015/06/17/cfos-mindful-of-cadillac-tax-in-upcoming-union-talks/

By KIMBERLY S. JOHNSON and VIPAL MONGA

For companies with a unionized workforces, the excise tax on high-cost healthcare benefits set for 2018 is a pressing concern for finance chiefs, as contract negotiations with several unions begin this this year.

Fran Shammo, CFO for telecom company Verizon Communications Inc.VZ -0.32%, called the Cadillac tax “a huge deal” for the company. Verizon is set to begin negotiations for a new contract with its unions next week. The issue of health plans will be the subject of “very difficult negotiations,” Mr. Shammo said during an interview on the sidelines of the Wall Street Journal’s CFO Network conference in Washington .

The New York-based company’s health plans covered almost 700,000 people last year, including workers, their families, and retirees at a cost roughly $3.2 billion.

He said the company’s negotiators will be trying to redesign its plans, including finding ways to encourage more workers to use urgent care centers instead of the more expensive hospital emergency rooms.

FULL story at link.