$117,000 Tax Possible on Town Health Policies

Bow Times August 2015

The Selectmen on July 14 began to wrestle with a new Obamacare tax that could cost the town up to $117,000 according to Town Manager David Stack. The “Cadillac Tax” is the informal name for the “Excise Tax on High-Cost Employer-Sponsored Health Coverage,” a provision of the Patient Protection and Affordable Care Act (ACA), which takes effect January 1, 2018.

The Cadillac Tax is intended to encourage employers, health insurance providers and consumers to control health costs. Beginning in 2018, a 40 % excise tax will be imposed on the “excess benefit” of employer group health plan coverage over and above certain threshold amounts. According to the N.H. Municipal Association, the estimated 2018 threshold amounts are $10,200 for individual coverage and $27,500 for 2-person or family coverage. Higher thresholds will apply for early retirees (age 55-65) and plans with a majority of employees in high-risk occupations (police and fire). The 2018 thresholds also may be increased depending on actual medical inflation between 2010 and 2018 and pursuant to an age and gender adjustment. Starting in 2019, the thresholds will be indexed for CPI rate of inflation. The insurer is responsible to pay the tax for fully insured group health plans; but for self-insured plans (like Bow that are part of a risk pool) it is still unclear who will be treated as the plan administrator responsible for paying this tax.

A meeting was held in July with Health Trust, the town’s risk pool. The selectmen are exploring ways in which to save money on health insurance by using something like an HRA (health reimbursement account). Additional meetings will be set up with other companies. The Benefits Committee is exploring incentives for employees to participate in wellness and preventative activities to help reduce costs.

$600,000.00 To Fix Birchdale Road Bridge?

Bow Times August 2015

The legislature passed a law in 2014 providing that the State will no longer be liable for meeting its obligation for red-listed bridges in order to prevent lawsuits. Town options are to use funds that are left in our budget or petition the State Department of Revenue Administration to exceed our bottom line budget and specify how we will cover that difference between a fund balance and a future tax bill.

The State DOT has offered to swap the Birchdale Bridge with Dunklee Road’s bridge budget for 2025 funding. $600,000 is what the State says is needed to fix the Birchdale Road Bridge.
Town engineers Dubois and King are preparing a proposal for a study which would need to be approved by the State. $273,000 is currently in our bridge fund. The town may be able to go to town meeting and use funds from the Capital Reserve fund because there is $442,000 in the highway construction fund.

Long-range planning for these bridges is contained in the Capital Improvement Plan. Dubois and King will have the scope of work and fee for the next Selectmen’s meeting. Town Manager David Stack is to determine how the State DOT calculated its $600,000 estimate for the Birchdale Road Bridge.

At the Selectmen’s meeting on August 18 our Senator and State Representatives will attend to discuss the State’s role in funding repairs.