Since Benefits enrollment started earlier this week, we have received a number of complaints regarding the reduction in the amount of money that employees are now allowed to put into their Flexible Spending Accounts. As you know, the NuStar plan has historically allowed employees to put as much as $7,500 per year into their Flexible Spending Accounts, which of course, was tax-free.
Unfortunately, the amount has now been capped at $2,500 by the Patient Protection and Affordable Care Act, which was signed into law by President Obama in 2010. We understand why many of you are disappointed by this reduction in your benefit options, but based on the new law we have no choice in this matter.
And while this change is one that directly impacts NuStar’s employees, it is only one of many problematic components of The Affordable Care Act, widely known asObama-Care. According to NuStar’s insurance broker, this program is projected to cost the company an additional $2.7 million once fully implemented and it will not provide any meaningful benefits beyond what we offer in our Healthcare package today.
The most costly component for NuStar is the “Cadillac Plan” excise tax, which imposes a non-deductible 40% tax for employer-provided healthcare coverage that exceeds the government-mandated maximum value for health care coverage. Our insurance brokers estimate that this penalty — for NuStar to provide health care coverage that is above the government’s threshold — will cost almost $1.8 million by the close of 2019.
Unlike many companies, NuStar has no plans to reduce its benefits, but penalizing companies for providing superior healthcare coverage seems counter-intuitive and counter-productive for our country. As you know,
the general election is less than three weeks away and we want to remind everyone just how important this election is to our future and we want to encourage all of you to vote for candidates that you believe will lead our nation, our employees and NuStar to a more prosperous future.