Days of physical exams and assessments at high-end executive medical facilities are significantly less prevalent for corporate chiefs than they used to be, according to the Wall Street Journal.
Luxury medical benefits — some of which could cost several thousand dollars per executive — are waning as firms cut executive perks in efforts to eliminate inequalities in employee benefits packages and avoid taxes and penalties association with the Affordable Care Act.
Here are five things to know about the decline in luxury health benefits for executives.
1. Only 6 percent of CEOs at the largest 500 U.S. companies had supplemental health insurance benefits in 2014, compared to 14 percent in 2008, according to research from Towers Watson, WSJ reported. Such benefits typically reimburse executives for out-of-pocket costs and copays, ranging anywhere from $10,000 to $50,000.
2. Several factors have contributed to decline in special health benefits for executives. First, pressure from shareholders and increasingly stringent healthcare law requirements are forcing companies to eliminate or reduce their executives' health benefits. Secondly, these platinum-level healthcare benefits are increasingly harder to justify as employees are shouldering a greater portion of the costs of their own employer-sponsored health plans, according to the report.
3. The Cadillac Tax is a major point of dissuasion regarding supplemental health insurance benefits for executives, as it will force employers to pay a 40 percent excise tax on plans exceeding certain government thresholds starting in 2018.
4. Companies are also waiting for the Internal Revenue Service to finalize ACA-required regulations on discrimination in healthcare benefits, which will impose hefty penalties if companies discriminate in the healthcare coverage they offer their highly compensated executives compared with the rest of their employees, according to the report.
5. However, while many companies struck executive health plans when the ACA came into effect to avoid penalties, some have been able to preserve them in grandfathered plans, according to the report. Additionally, because physical exams and annual checkups are considered preventive care measures, insurers can share more of the cost with employers under the ACA.