How benefit advisers can hold healthcare plans accountable for their prices

Brokers and consultants already know that much of the growth in health benefit costs is not driven by insurer and TPA rate increases, but rather by the increase in the price and volume of healthcare services. While some of these costs are due to growing survivability rates for serious diseases and therapeutic improvements, much are avoidable, such as expenses associated with unnecessary care and unnecessarily expensive care. Evidence of variability of costs is found in the fact that unit cost and utilization can vary wildly from health system to health system, even within the same market.

Read more: 4 drivers of healthcare costs — and what advisers should do

Just because macro healthcare economics is the primary driver of overall health costs, doesn’t mean that health plans are powerless to control price increases. Even though health plans can and do negotiate rates directly with health systems in their networks, too often they don’t do everything they can to offer exceptional value to their customers. They don’t ask the right questions of health systems, they don’t practice thorough utilization management, and they don’t contract exclusively with providers who focus on high-value care. In other words, they don’t work hard enough to eliminate unnecessary costs or to bring prices down. Instead, they treat them as a given and pass those costs on to their customers.

Too often, benefit advisers take the whole healthcare market as a given, especially due to the popularity of broad preferred provider organization (PPO) networks, which include almost every system in an area. But the reality is that economics vary dramatically from system to system, so employee benefit advisors need to understand local economics in order to effectively evaluate network differences and find value. They can do this by:

  • Heavily and skeptically questioning carriers and TPAs to understand their networks and participating providers. Examples of questions to ask include: Tell me your opinion about different health systems in your network? How much do negotiated fees vary for outpatient services, professional services, etc.? Why is a specific expensive provider part of your narrow / high-performance network?

It’s also important to ask when a contract with a specific health system is up and if it will be renegotiated soon, since a new contract could include very different rates from the current one. Note that some of the time, carriers will discuss rates as a function of Medicare, but because Medicare DRG rates can vary dramatically from hospital to hospital, an adviser needs to understand Medicare base rates.

  • Analyzing claims. Every adviser has plenty of these available to them, and they should be analyzing those claims to determine which providers are lower cost and which are higher cost. In particular, it’s important to look at outpatient rates, facility rates, and professional rates, by specialty. It’s also important to compare the same diagnosis codes across providers. For example, claims could reveal that a hypothetical Dr. Jones operates on 100 patients out of 100, while a hypothetical Dr. Smith operates on only 50 patients out of 100 with the same condition. To figure out why this discrepancy exists, we would have to dig deeper since some doctors or practices may cater to only high-risk patients. Claim data can help shed light on health plan information that is not typically available to the public as health plan rates are often proprietary but appear on claims.

Taking all of these steps will help benefit advisers achieve something essential: holding health plans accountable for their prices. If a health plan doesn’t aggressively hunt for high value providers and reward them, you should ask why. And if you don’t like their answer, you probably identified a plan that isn’t a good fit for your clients because it doesn’t deliver on what matters most: quality care offered at an affordable price without compromising coverage.

SOURCE: Cohen, A. (04 November 2020) "How benefit advisers can hold healthcare plans accountable for their prices" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/opinion/how-benefit-advisers-can-hold-healthcare-plans-accountable-for-their-prices


Overview of COVID-19 Law and Guidance for Health and Welfare Plans

The business operations of many small and large companies have been significantly affected due to the coronavirus pandemic. During this time, health and benefit plans are also being affected. Read this blog post to learn more.


The COVID-19 pandemic has significantly affected the business operations of small and large employers alike. To mitigate the harm from the pandemic to employers, the government has enacted major legislation and issued numerous guidance in the past few months pertaining to COVID-19, including rules that address various aspects of employee benefits.

This article provides an overview of significant COVID-19 legislation and guidance related to employer-sponsored health and welfare benefit plans that has been enacted or issued to date.

Some of these changes are mandatory for group health plans. Other are optional. Employers should carefully review these rules to determine any compliance obligations as well as any opportunities to benefit their businesses and respective employees.

Mandated Coverage of COVID-19 Testing (Mandatory)

Effective March 18, 2020 and until the end of the national emergency period for COVID-19, the Families First Coronavirus Response Act (FFCRA) requires group health plans to cover:

  • COVID-19 diagnostic testing.
  • Certain items and services that result in an order for, or administration of, the testing.

Plans must provide this coverage without imposing any requirements for cost-sharing, prior authorization, or medical management.

CARES ACT

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which was signed into law on March 27, 2020, amended the FFCRA's coverage mandate to:

  • Expand the scope of COVID-19 diagnostic tests that must be covered.
  • Include rules regarding the rate at which a plan must reimburse a health care provider for the mandated services.
  • Require coverage of preventive services and vaccines for COVID-19 as of 15 days after such a service or vaccine is given an "A" or "B" rating in a recommendation by the U.S. Centers for Disease Control and Prevention (CDC) or U.S. Preventive Services Task Force.

ADDITIONAL GUIDANCE

On April 11, 2020, the FFCRA and CARES Act FAQs provided additional information about this COVID-19 mandate. Items included details on required coverage of COVID-19 antibody tests, rules regarding required disclosures of the new coverage to plan participants, and which items and services related to COVID-19 testing must be covered by a plan.

Continuation of Health Benefits During Certain Leaves of Absence (Mandatory)

The FFCRA also requires (with some exceptions) employers with fewer than 500 employees to provide certain paid sick leave and family and medical leave related to certain COVID-19 reasons, as follows:

  • Paid sick leave. An applicable employer must provide two weeks of emergency paid sick leave (EPSL) to an employee who is unable to work (or telework) due to certain reasons related to COVID-19. Reasons include quarantining of an employee (due to a Federal, state or local order or advice from a health care provider) experiencing COVID-19 symptoms, caring for an individual who is quarantined, and caring for a child under age 18 whose school or child care provider is closed.
  • Family and medical leave. The employer must also provide up to twelve weeks of expanded Family Medical and Leave Act (FMLA) leave (ten of which is paid) for an employee who has been employed for at least 30 days and who is unable to work (or telework) due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.

During FMLA leave, an employer is required to allow the employee to continue his or her group health coverage at the same premium rate as that of active employees. The DOL has also issued FAQs stating that employers must continue employees' coverage during EPSL, as well. Note, there are also implications for retirement plans under the FFCRA and CARES Act. Although those retirement plan rules are not discussed in this article, some of the CARES Act rules are conceptually similar for retirement plans (e.g., 401(k) plans may allow participants to take "Coronavirus-related" 401(k) plan distributions due to certain COVID-19 reasons).

High-Deductible Health Plans and Health Savings Accounts (Optional)

IRS GUIDANCE

IRS Notice 2020-15 (March 11, 2020), which was issued prior to passage of the FFCRA and CARES Act, provided that a high-deductible health plan (HDHP) will not lose its HDHP status if it covers COVID-19 testing and treatment before the statutory minimum HDHP deductible is met. Therefore, the plan can cover those COVID-19 related services without causing participants to be ineligible to contribute to a health savings account (HSA). IRS Notice 2020-29 (May 12, 2020) clarified that the provisions in Notice 2020-15 apply to an HDHP's reimbursement of expenses incurred on and after January 1, 2020.

CARES ACT

The CARES Act amended the HSA rules to provide that, for plan years before December 31, 2021, an HDHP does not lose its HSA-eligible status if it covers telehealth and other remote healthcare services before the HDHP deductible is met. This CARES Act provision is broader than the IRS Notices, as it provides that an HDHP can cover telehealth services regardless of whether the services are related to COVID-19. The CARES Act also allows participants to use their HSAs, health flexible spending accounts (FSAs), and health reimbursement arrangements (HRAs) to pay for certain over-the-counter drugs without a prescription as well as certain menstrual care products.

Extended Form 5500 Filing Deadline for Certain Plans (Optional)

IRS Notice 2020-23 (April 9, 2020) extended certain deadlines for a plan to file the required annual Form 5500. Under Notice 2020-23, the Form 5500 deadline was extended to July 15, 2020 for any plan whose plan year ended in September, October, or November 2019 (or any plan that was given a filing extension between April 1 and July 15, 2020). Ordinarily, a plan must file its Form 5500 (absent an extension) by the last day of the seventh month following the end of the plan year.

Relief for Certain Disclosures Required by ERISA (Optional)

EBSA Disaster Relief Notice 2020-01, which was issued by the DOL on April 28, 2020, extended the deadlines for plans to provide certain notices and disclosures under Title I of the Employee Retirement Income Security Act of 1974 (ERISA). Under Notice 2020-01, a plan will not be treated as violating ERISA if it fails to timely furnish a notice, disclosure, or document required by Title I of ERISA between March 1, 2020 and 60 days after the announced end of the national emergency declaration for COVID-19. The plan fiduciary, however, must act in good faith to furnish the notice, disclosure, or document as soon as administratively practicable. For this purpose, a plan fiduciary can meet the "good faith" standard by furnishing a document electronically if it reasonably believes that the recipient has access to electronic communication.

Extensions of Certain Plan Deadlines (Mandatory)

A joint notice issued by the DOL and IRS (published May 4, 2020) required group health plans to extend certain timeframes for participants during the "outbreak period" (defined as the period from March 1, 2020 until 60 days after the announced end of the national emergency for COVID-19). Those plans are required to disregard the outbreak period for purposes of determining the following periods and dates:

  • The 30-day/60-day special enrollment period under the Health Insurance Portability and Accountability Act (HIPAA).
  • The 60-day deadline for a qualified beneficiary to elect continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).
  • The deadlines for a COBRA qualified beneficiary to pay his or her required COBRA premiums.
  • The deadline for an individual to notify the plan of COBRA certain qualifying events (e.g., divorce).
  • The deadlines for a participant to file benefit claims, appeals, and external review requests with the plan (or to perfect an external review request).

Because of this joint notice, a group health plan must essentially "pause" the above deadlines during the outbreak period. For example, if an individual experienced a COBRA qualifying event on March 1, 2020, the individual would have until 60 days after the end of the outbreak period (rather than 60 days after March 1) to elect COBRA coverage. This is because the joint notice requires a group health plan to pause the 60-day timeframe for COBRA elections during the outbreak period. Also, because the joint notice was issued on May 4 and is retroactive to March 1, plans may be required to re-process previous claim denials that were based on a participant's failure to meet one of the above deadlines between March 1 and May 4.

Cafeteria Plans and Flexible Spending Accounts (Optional)

2020 MIDYEAR ELECTION CHANGES

IRS Notice 2020-29 (May 12, 2020) relaxed the rules regarding cafeteria plan pre-tax elections in light of the COVID-19 pandemic. Under Notice 2020-20, employers may (but are not required to) amend their cafeteria plans to allow participants to make the following mid-year, pre-tax election changes in 2020:

  • An election to enroll in the health plan by an eligible employee who previously declined coverage (e.g., someone who waived coverage during open enrollment).
  • An election to change plan options (e.g., from an HMO to a PPO) or add dependents.
  • An election to drop coverage by a participant.
  • An election to enroll in or drop health FSA or dependent care FSA coverage or to increase or decrease health FSA or dependent care FSA contributions.

An employer that wishes to adopt any of all of the above cafeteria plan changes must disclose the changes to employees and amend its cafeteria plan by no later than Dec. 31, 2020 (i.e., an amendment is not required in advance of making the changes).

EXTENDED GRACE PERIOD TO INCUR FSA CLAIMS AND INCREASE OF MAXIMUM HEALTH FSA CARRYOVER AMOUNT

Notice 2020-29 also permits employers to amend their health and dependent care FSAs to allow employees to incur eligible claims through the end of the 2020 calendar year for any FSA plan year (or for any FSA grace period that ends in 2020). For example, if a health FSA has a grace period until March 15, 2020 for a participant to incur eligible claims for the 2019 plan year, the FSA can allow participants to incur expenses through 2020 and use their 2019 elections to pay for those expenses.

This change does not apply to FSAs with a carryover provision. IRS Notice 2020-33 (May 14, 2020), however, provides for a permanent FSA carryover increase based upon annual indexing. For the 2020 plan year, employers may amend a cafeteria plan with carryover provision to allow participants to carry over up to $550 in unused health account balances in the 2021 plan year. An employer that adopts the extended FSA grace periods or the increased carryover limit must amend its cafeteria plan or FSA (as applicable) by no later than December 31, 2021.

Tax-Free Payment of Employees' Student Loans (Optional)

The CARES Act amended Section 127 of the Internal Revenue Code (education assistance programs) to permit employers to pay up to $5,250 of an employee's student loans on a tax-free basis. This provision applies from the date of enactment of the CARES Act (March 27, 2020) through the end of 2020. The payment must be for either the principal or interest of a qualifying education loan incurred by the employee, and the employer can make payment either directly to the lender or as a reimbursement to the employee.

Takeaways for Employers

As employers grapple with the impact of the COVID-19 pandemic and return to normal business operations, it is important for them to be aware of their compliance obligations under the FFCRA, CARES Act and other guidance issued by governmental agencies. Employers should also carefully review the guidance and legislation for potential avenues of benefit for their business and employees.

Additional guidance for both mandatory and optional items is likely forthcoming as well, and COVID-19 continues to have a major impact on both companies and individuals as new infections spike in numerous states. Accordingly, employers would be well-advised to keep a close eye out for new legislation and guidance in the coming months and periodically evaluate their benefits programs for compliance and competitive considerations.

SOURCE Tyler Hall, A.; Schillinger, E. (16 July 2020) "Overview of COVID-19 Law and Guidance for Health and Welfare Plans" (Web Blog Post). Retrieved from https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/overview-of-covid-19-legislation-and-guidance-for-benefits-plans.aspx


Guidance Clarifies COVID-19 Diagnostic Testing Mandate

As many know, on March 18, 2020, the president had signed the Families First Coronavirus Response Act (FFCRA), which ultimately includes a requirement that health plans cover COVID-19 testing. Read this blog post for frequently asked questions and their answers provided from SHRM.


The Departments of Labor, Health & Human Services, and the Treasury recently issued a set of frequently asked questions (FAQs) that provide guidance to group health plan sponsors on various issues related to implementation of the COVID-19 diagnostic testing mandate.

Background

On March 18, 2020, the president signed the Families First Coronavirus Response Act (FFCRA), which includes a requirement for group health plans to cover COVID-19 diagnostic testing—including the cost of office, urgent care, ER and telehealth visits in order to receive testing—without cost-sharing or prior authorization. The following week, he signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which expands the COVID-19 diagnostic testing mandate provisions.

Departments' FAQs

The Departments of Labor, Health & Human Services, and the Treasury (the departments) issued a set of FAQs on April 11 that provide guidance to group health plan sponsors on various issues related to the implementation of COVID-19 diagnostic testing requirements. The departments anticipate releasing additional guidance in the future.

The FAQs address the following issues.

Which group health plans are subject to the mandate?

Most group health plans are subject to the mandate. This includes grandfathered plans under the Affordable Care Act, non-federal governmental plans, and church plans. The mandate does not apply to retiree-only plans or to excepted benefits, such as dental, vision, and most EAPs.

When are plans first required to comply and for how long?

Plans are required to cover items and services relating to COVID-19 diagnostic testing that were furnished on and after March 18, 2020, and to continue to do so through the end of the public health emergency. Unless extended or terminated earlier, the public health emergency related to COVID-19 will end on June 16, 2020.

What types of testing must be covered?

The guidance clarifies that in addition to tests that determine whether an individual has the virus based on the presence of COVID-19 virus genetic material in the body, a group health plan must also cover serological testing to detect COVID-19 antibodies. All tests must be either: (1) authorized by the Food and Drug Administration (FDA), (2) under review by the FDA, (3) developed and authorized by a state, or (4) determined appropriate by the Secretary of Health & Human Services.

What items and services must be covered in full during a visit?

Health plans "must cover items and services furnished to an individual, during visits that result in an order for, or administration of, a COVID-19 diagnostic test." The FAQs clarify that if the attending provider determines that other tests, such as influenza or blood tests, should be performed during a visit to help determine whether COVID-19 diagnostic testing should be conducted, "and the visit results in an order for, or administration of, COVID-19 diagnostic testing," the plan must cover those services in full.

If COVID-19 diagnostic testing is not ordered or administered as a result of the visit, full coverage for these services is not required.

Can a plan impose any cost-sharing, prior authorization, or medical management requirements for COVID-19 testing?

No.

Does the requirement to cover COVID-19 diagnostic testing without cost-sharing apply to out-of-network providers?

Yes. This requirement applies to out-of-network providers, including HMOs that otherwise do not cover non-emergency out-of-network services. Out-of-network providers would be reimbursed based on the cash price listed by the provider on a public website or the amount negotiated by the plan with the provider.

Under what circumstances are services considered to be furnished during a visit?

The FFCRA requires plans to cover COVID-19 diagnostic testing services during office visits including in-person and telehealth visits, as well as urgent care centers and emergency rooms. The guidance defines the term "visit" broadly "to include both traditional and non-traditional care settings in which a COVID-19 diagnostic test … is ordered or administered."

While the guidance does not require group health plans to include a benefit with a telehealth provider, any services offered by a provider through a telehealth visit or other remote visit for COVID-19 diagnostic testing must be covered in full.

What participant communication requirements apply?

The ACA requires group health plans to provide participants with at least 60 days' advance notice of a material modification to information contained in a Summary of Benefits and Coverage (SBC). The FAQ states that the departments will not enforce this advance notice requirement to the enhanced coverage of items or services related to the diagnosis or treatment of COVID-19. The non-enforcement policy will also apply to the addition or expansion of telehealth and other remote care services. However, plans "must provide notice of the changes as soon as reasonably practical." The guidance notes that the departments would continue to take enforcement action against a plan that attempts to offset the cost of the COVID-19 diagnostic testing requirement by eliminating or limiting benefits or increasing cost-sharing on other services.

The non-enforcement policy applies during the public health emergency period. If the benefit changes are continued beyond the public health emergency period, then plans will be required to update plan documents and terms of coverage.

Employers should communicate the coverage changes to participants as soon as possible. Using updated SBCs for this communication is an option for employers, but not required.

What about SMMs?

Unlike the SBC requirements, unless there is a material reduction in benefits, a group health plan does not have to issue a statement of material modification (SMM) for a change until 210 days after the close of the plan year in which the change was adopted. Nevertheless, sponsors may want to consider providing notice of the changes in the form of an SMM.

Can an employer offer benefits for COVID-19 diagnostic testing under an EAP or onsite medical clinic that constitute an excepted benefit without impacting its excepted benefit status?

Yes, diagnostic testing coverage can be provided without impacting the excepted benefit status of the EAP or onsite medical clinic.

While the guidance strongly encourages plan sponsors to promote the use of telehealth services, similar relief was not provided for telehealth benefits. Some employers are considering offering a standalone telehealth benefit to employees who are not eligible for medical coverage, or who have waived coverage. However, a standalone telehealth benefit would not satisfy the ACA market reform requirements unless it qualifies as an excepted benefit.

Use of onsite medical clinics to provide testing could be part of an employer's return-to-work program.

In Closing

The FAQs provide important guidance for employers on implementation of the diagnostic testing requirements and include actions employers need to take to communicate these provisions to employees.

 

Richard Stover, FSA, MAAA, is a principal at HR advisory firm Buck. Leslye Laderman, JD, LLM, is a principal in the firm's Knowledge Resource Center. This article originally appeared in the April 15, 2020 issue of Buck's For Your Information. © 2020 Buck Global LLC. All rights reserved. Republished with permission.

SOURCE: Stover, R.; Laderman, L. (21 April 2020) "Guidance Clarifies COVID-19 Diagnostic Testing Mandate" (Web Blog Post). Retrieved from https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/guidance-clarifies-coronavirus-diagnostic-testing-mandate.aspx


5 ways benefits educators can ease the open enrollment process

Are you prepared for open enrollment? HR professionals are responsible for effectively communicating plan options and changes to employees so they make informed decisions regarding their coverage and healthcare. Continue reading to learn more.


Open enrollment season is on its way, which means that HR’s already full plate just got a bit fuller. In addition to developing competitive health plans that attract and retain top talent – talent of all ages and with varying needs – HR pros are also responsible for effectively communicating plan options to employees to ensure that individuals make informed, cost-conscious decisions about their coverage and care.

See also: Here’s how HR pros can breeze through open enrollment

As the healthcare landscape becomes more complex, so do employee questions around their health care benefits. Many healthcare consumers today don’t feel comfortable navigating the health care system – which is why most roll over the same plan year after year. While HR teams want to manage the influx of employee questions around their benefits options, they struggle to provide the necessary guidance given their current bandwidth. Covering health plans in a large townhall meeting won’t provide the personalized information that employees need to make educated decisions. To deliver a more personal, empowering experience, organizations can look to benefits educators to supplement strapped HR teams.

Benefits educators can help individuals better understand the plan options available to them and select the package that offers the coverage they need at the price that best fits their budget. To ensure that benefits educators are aligned with the organization’s strategy, HR teams should arrange for educators well in advance of open enrollment so they are equipped to best explain the employer’s benefits plan options. Once up to speed, benefits educators can hold one-on-one conversations with employees to:

1. Define healthcare terms that employees don’t understand. With low healthcare literacy rampant across the U.S., disturbingly few employees are comfortable defining basic health terms such as “deductible,” “copay” or “coinsurance.” benefits educators cannot only explain these important terms but also help employees understand their significance in their coverage selection process.

2. Compare different plans to suit each employee’s needs. Benefits educators will work to understand the specific needs of each employee they meet. By taking the time to sit and get to know each employee, the benefits educator can recommend options that provide the coverage that best meets the needs of the employee and his or her family.

See also: Avoid these 12 Common Open Enrollment Mistakes

Third-party, independent benefits educators can be particularly valuable for employees who do not feel comfortable posing personal questions to their coworkers. By meeting one-on-one with an outsider who understands both benefits in general and company options in particular, employees are often more inclined to raise specific health or personal details that should guide their benefits selection. In fact, 45 percent of employees say they would prefer to speak to a benefits expert when choosing their coverage.

3. Equip employees with the information they need to choose their coverage. Left to their own devices, 83 percent of employees spend less than an hour reviewing their plan options before open enrollment – a lack of preparation that does not bode well for educated benefits selection. benefits educators can focus on the details that matter – saving the employee time and effort.

4. Explain voluntary benefits. Despite the increasing popularity of voluntary benefits, many employees are still confused about what they are, how they work and why they might be helpful. In reality, certain voluntary benefits can help control health costs and bridge the gap between medical coverage and out-of-pocket costs – added expenses that concern 61 percent of employees. In today’s multigenerational workforce – where employees have very different priorities when it comes to their health and financial wellness – benefits educators can dispel some of the mystery and suggest options that might meet individual needs.

5. Empower employees to make the most of their benefits year-round. Benefits educators can lay the groundwork for more educated health care consumers by directing employees to resources where they can find more information about their coverage and how their plans work after the open enrollment ends.

See also: 5 tips to make this the best open enrollment ever

More informed employees not only make smarter choices about their coverage and care but also better appreciate their employers – which has the potential to help with retention and business productivity. Ultimately, organizations see a win-win-win: happier employees who save on care, happier HR teams who save on time and happier executives, who see a significant return on their health care investments.

SOURCE: Murdock, G (21 September 2018) "5 ways benefits educators can ease the open enrollment process" (Web Blog Post). Retrieved from https://www.benefitspro.com/2018/09/21/5-ways-benefits-educators-can-ease-the-open-enroll/


'Cadillac' Tax Could Diminish Union Health Plans

Originally posted by Bob Herman on March 3, 2015 on businessinsider.com.

Health plans obtained through union collective bargaining agreements often include much more generous benefits than other employer-sponsored plans. But such benefits are likely to be pared down as the Affordable Care Act's excise tax nears, a new study in Health Affairs contends.

That excise tax, often called the “Cadillac” tax, will go into effect Jan. 1, 2018. A 40% tax will be levied on every dollar of total premiums paid above $10,200 for individual health plans and $27,500 for family plans.

Policymakers included the Cadillac tax in the ACA as a way to raise revenue to fund the law. The Congressional Budget Office estimates it will bring in $120 billion between 2018 and 2024. Most of that will come from higher taxes on employees' taxable wages instead of the tax-exempt insurance benefits.

But the tax also was viewed as a way to reduce the number of health plans that have little cost-sharing and premium contributions, which some argue contribute to the overuse of healthcare. President Barack Obama has been quoted as saying the excise tax will discourage “these really fancy plans that end up driving up costs.” Lavish executive-level health plans and collegiate benefit packages, like Harvard University's, have been oft-cited targets. However, many collectively bargained policies fall into the Cadillac bracket as well.

The Health Affairs study, published Monday, sought specifics about what kind of health benefit packages unions provide for employees. People with union plans have lesser out-of-pocket obligations and don't pay as much per month toward their premium as others with employer-based insurance, but the surprise was “the magnitude of the differences for certain things,” said Jon Gabel, a healthcare fellow at NORC at the University of Chicago and one of the study's authors.

For instance, families in collectively bargained plans paid about $828 per year toward their premium, or about $69 per month, according to the study's surveyed data. That compared to $4,565 for the average employer-sponsored family plan, or about $380 per month, according to 2013 data from the Kaiser Family Foundation.

Cost-sharing requirements also were less onerous in union health plans, the study found. The average annual in-network deductible for an individual in a collectively bargained plan was $203. The average deductible at other employer-based plans was almost six times higher at $1,135.

Although the federal government is considering some flexibility for “high risk” unionized occupations such as miners and construction workers, many employers are looking to get ahead of the excise tax by slimming down benefits.

“For those who are fortunate to have a Cadillac plan right now, it's probably not going to be so comprehensive in the future,” Mr. Gabel said. However, he said, reduced benefits should lead to increased wages to offset higher cost-sharing.

Tom Leibfried, a health care lobbyist for the AFL-CIO, a federation of 56 unions, calls the Cadillac tax “a misnomer” because union plans apply to middle-class Americans with modest wages. The issue should not be about the generosity of health coverage, but rather whether the coverage is appropriate for people based on the health care costs in their geography, he said.

“Trying to control utilization in that way really does amount to a cost-shift,” Mr. Leibfried said. “This is really a middle-class problem.”

Higher compensation supplanting lost benefits is not a sure thing either, Mr. Leibfried said. Indeed, wages and salaries have been mostly stagnant the past decade, barely edging out inflation even as health benefits shrink.