Home Government Brick Residents Could Face $600K Tax For ‘Cadillac’ Employee Benefits

Brick Residents Could Face $600K Tax For ‘Cadillac’ Employee Benefits

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The Brick Township municipal complex. (Photo: Daniel Nee)
The Brick Township municipal complex. (Photo: Daniel Nee)
When the Affordable Care Act’s so-called “Cadillac” tax penalty kicks in in 2020, Brick taxpayers could be on the hook for about $600,000 since the vast majority of employee health benefits costs are over limits prescribed in the law.

The tax was included in the “Obamacare” law for several reasons, primarily to lower healthcare spending by spurring employers to offer less costly plans to employees and reduce tax preferred treatment of employer care. The tax amounts to 40 percent of the cost of health coverage that exceeds federal limits, which were set at $10,200 for individual coverage, and $27,500 for family coverage. New Jersey’s public employees’ plans often exceed the threshold, with the tax having to be paid by their employer – the taxpayers.

The Brick Township council this week unanimously voted for a resolution requesting Congress to repeal the tax, which will cost taxpayers about $600,000 above and beyond the millions of dollars already budgeted for employee health care packages.

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“We believe that the legislature did not intent to negatively impact towns or taxpayers with this provision, so we’re asking the state and federal governments to repeal that portion,” said Mayor John Ducey.

The revelation that Brick’s municipal employees’ plans would fall above the Cadillac tax threshold elicited anger among several residents at the council meeting, who argued that public employees’ plans were out of sync with private industry, and should be reduced.

“My taxes are going to go up because of someone’s Cadillac benefits,” said resident Vic Fanneli, addressing township council members. “You can’t afford it, the state can’t afford it, and I can’t afford it. But they’re going to get them anyway. They want you to get rid of Cadillac benefits because nobody can afford them anymore. You have to change that. You have to go into negotiations and say, ‘this is what we can do, and this is what we can’t.’”

Brick is self-insured for major medical insurance, meaning that medical claims up to $6.9 million are directly paid by the municipality before being sent to a secondary insurance provider, said Chief Financial Officer Scott Pezarras. But a value is still calculated for the various plans offered to employees based on the actual cost and the value of benefits they include.

The full package of employee benefits, including dental and vision care, is worth between $34,162 and $34,652 for family coverage and between $12,627 and $12,842 for individual coverage. The Cadillac tax threshold is based on major medical premiums and prescription premiums – not vision or dental care – however those costs would also be above the federal limits. For medical and prescription coverage alone, township employee plans range from $29,032 to $33,124 for family coverage and $10,779 and $12,254 for individual plans. There are also plans for two adults, one parent and one child, and parents and multiple children, all of which are over the limit.

Pezarras said though there are estimates available, the exact impact of the Cadillac tax is yet to be known, since the Affordable Care Act includes language that bases limits on the consumer price index.

Ducey said the township recently asked employees if they would be interested in taking lower-cost plans to reduce their own contributions to their medical insurance as well as the town’s cost, and no employees took the offer.

“There’s no more free lunch, the township can’t afford it,” said resident George Scott.

“For us to try to offer something less than what we offer now is something that would have to be negotiated,” said Business Administrator Joanne Bergin.

This year, Brick’s medical insurance costs are rising by 9 percent and prescription costs are rising by a staggering 34 percent.

Larry Reid, who as a member of the school board until 2015 was able to spearhead a reduction to the district’s health insurance premiums, suggested the township get tougher in negotiations with union bargaining units. Currently, the township’s negotiating team consists of township employees, which he feels is a conflict of interest.

“You have town employees negotiating with town employees,” said Reid. “You really don’t have a fair negotiation. When we had negotiations on the school board, we had school board members negotiating against the unions.”

“I believe in keeping promises, but the promises made on health care in these towns across the state are unaffordable and unsustainable,” Reid continued. “The union people vote out anybody who doesn’t give them everything they want. To negotiate hard against them is difficult.”

No one spoke in favor of maintaining the benefits packages. Public employee unions have often argued that their members contribute to the cost of their health care packages and have made concessions to pay larger percentages in recent years. Union leaders have also said that private employees should be protesting cuts to their own insurance rather than favoring expanded cuts to public employees’ insurance plans. Under the state’s 2011 benefits reform law, public employees contribute a set percentage toward theirs benefits’ cost, depending on their salary. The contributions range from 3 percent for employees who make less than $20,000 to 35 percent for employees who earn over $90,000.

The $600,000 figure represents only the municipal impact of the Cadillac tax. It is likely that school employees’ plans also exceed the threshold.


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  • SoWhat?

    Not 1 single republican in congress voted for Obamacare. Not One!

    This is a democrat ripoff of companies and taxpayers.

    Make the township employees pay the penalties like the rest of America has to, or give them lower costing plans like the rest of America.

    Vote for Trump

    • Spell Check

      Exactly town is overstaffed way to much stuff that can be part time labor done by anyone. The township is sad how it’s run and needs actual change

    • Spell Check

      need to eliminate some of the excessive town vehicle purchases to I see way to many bean knew vehicles sitting in parking lots. Seems like every employee has a brand new personal work vehicle. Why do they need all of these. Could be a few vehicles with a case by case basis and sign in sign out process instead we insure register and pay for upkeep on who knows how many vehicles. Stop the wasting !!

    • Brian

      You sound like Bernie Sanders now though…. Want the employees to have less because you don’t have as much? How about fighting to get yourself better health care? How about blaming the BS insurance companies and the ridiculous scheme that they have going on to rob everyone of us

      • CRITTERCOLLECTOR

        Put the blame where it belongs….on Obamacare…it was written into the law….Remember..you have to pass the bill to find out what’s in it???

      • J W

        You’re calling these malcontent rabble what they are- intellectually dishonest frauds. They don’t like that much.

  • SoWhat?

    Ducey and Fozman and company should enjoy this Obamacare tax. They are big Obama supporting democrats.

  • Spell Check

    Way to much money I spent on this. Turn 1/2 of town staff to part time. Especially town inspectors I see paid to do nothing while mantaloking rd is getting worse by the day. Church and mantoloking meet is a junk yard are both side now. An abandoned summer house in my neighborhood has a collapsed tree across the yard. No results. I’ll start to see a ticket soon because my paint chipped on my foundation. The enforcement of these guys is insane. Pure intention hurrassemen tri specific people. While every company in brick has yet to put a dime back into their bussiness since the 80s we need to fix this. I tell the mayor to eliminate his health benefits to the taxpayers costs. When I run for mayor I will be surrendering my Healh benefits to not add to this looming debt. Brick needs to hanker down and be ready because the next few years are crucial to our towns existence. Brick Stong don’t sell!!

    • KaayC

      Don’t sell? Sell to whom? Who the heck would buy? This area is depressed P-E-R-I-O-D. And I am not by Mantaloking Road. It has just gotten ugly out there. Why can’t we raise revenues by fining the pineys that leave furniture out at the curb for months on end or allow the mold to entirely encapsulate their homes? Somehow this area confused freedoms with the freedom to be slobs. Where is code enforcement? The town needs to pave. The empty strip malls need to be leveled – WOW, Pathmark Plaza, etc. We see tax increases, but few services apart from Police and schools. The recent plowing done by amateur cowboys took out driveways, mailboxes, and shrubs. People still gave debris from the winter storm all around big tree limbs. I resent getting chased out by the decline, but see no option but to bail at a loss as soon as I can. The door won’t hit me in the a$$ because it is off the hinges.
      Sorry to sound off like ths, Spell, but see no progress or hope here.

  • Richard Weber

    Ditto SoWhat! this town can no longer get away with this corrupt way of trying to make the taxpayers pay these increased monies. Either the employees of the town accept much lower rated benefits (according to their great leader who made obamacare), or pay the increases themselves if they want to keep the higher bennies, or face losing their jobs in a town wide downsizing, until THE OPERATING COSTS OF THE TOWN COME IN LINE WITH FAIRER TAXES…..CASE CLOSED! It has come to a crisis, when many employees salary is close to what their health costs are, this is mind boggling! And part time employees must be taken off the benefits wagon, WE CANNOT AFFORD THESE LUXURIES!

    The taxpayers cannot afford to pay these higher premiums. THAT IS WHAT THE TAXPAYER WANTS, HOW ABOUT WE ALL SATISFY OURSELVES BY GOING TO COUNCIL MEETINGS AND START GETTING THESE PEOPLE WORKING ON BEHALF OF THE TAXPAYER, NOT THE EMPLOYEE MAKING DEMANDS.

    And please, when are they going to stop wasting money on new vehicles all the time, and who is checking these vehicles for smoking. It also seems many times often then not, I see employees smoking in our vehicles? What is up with that. I thought there was a no smoking requirement in township owned vehicles? No wonder the insurance is so expensive, probably because of the illnesses these town smokers are more susceptible to getting smoking related disease, and they toss the butts out the window, have seen that one a few times as well. Oh, and by the way, how is the sick time and workers comp going these days? I know it has been out of control for some time, not sure if the “Ducey team” has gotten the reigns in on that one, or if they care less like the last team in office?

    When my social security goes up, only then will I consider giving more of MY MONEY towards higher health benefits through my taxes….why don’t these people get it?

    • CRITTERCOLLECTOR

      Put the blame where it belongs…Obamacare…read up on it…It is not the state,or towns fault, it is written into the Obamacare law.

      • Deport all illegals now

        BINGO!
        You get what you vote for.

  • Kathy

    This is what Trump is talking about. He will get rid of Obama care. Garbage.

  • Chief Wahoo

    Chief Wahoo has Been trying to wake up the sheep for over 5 years. Admittedly with not much success as they enjoy getting their hard earned money taken by the public takers. But what Chief Wahoo couldn’t do, simple economics will do. Infinite growth on a finite planet does not work. We have hit the peak growth and finally the public parasites have killed the host. The taxpayers are busted out and broke. And since public takers produce nothing.. It’s over. Time for a RESET. But until then put all the public takers on Obamadontcare and stop paying the part time takers for any benefits at all. Especially the ones who said they wouldn’t take benefits BEFORE they got your votes.

    WAKE UP BRICKTUCKY. YOU ARE THE OWNER AND THEY ARE THE SERVANT AND YOU CAN NO LONGER PAY FOR THESE CADILLAC BENEFITS (that you can’t even get for your family)!!!!!!

    • Brian

      Anyone who speaks in the 3rd person is a sure jerkoff…

  • CRITTERCOLLECTOR

    This is from the Obamacare train wreck. It was supposed to happen earlier, but Obama changed the

  • J W

    Instead of bashing Obamacare, maybe the township’s employee health plan should be downgraded to that of a Chevy. My benefits aren’t that good and never were that good frankly- although I think they’re better now than they were 10 years ago since the premiums are way down: my old cheapskate boss had a 3rd rate plan that was no longer legal under Obamacare so we got a new plan thank God. We plebs shouldn’t be financing princely living.

  • Richard Weber

    I agree JW, my benefits are far far far below what the towns benefits are. I have Hospital and medical, but cannot afford dental and vision. Most of us do not have what they have, so how can they have better than what we the tax payers have, when we are paying the bills? Ridiculous to common sense. ObamabamabamaCare is really bad, but like Pelosi said, you have to pass it to see what is in it!? Now I can see using the term “jerkoff” with that statement to that idiot. The third person is the most common point of view used in writing and is the traditional form for academic writing. What form was your comment in Brian, just trying to understand?

    • J W

      I wouldn’t bash Obamacare- it helped me out a lot. The old plan I was on was a scam that I got *nothing* out of for the premiums that were deducted from my paycheck, but it was made illegal under that law. I’m all for taxing fat cat plans like this, but the township shouldn’t be giving out Cadillac plans. Their rate of pay is already probably better than the private sector right now thanks to a depressed labor market, unlike it was maybe 15 years ago when I quit working for the county after a lengthy career of 3 years. If we’re all going downhill, everyone’s going downhill until the guilotines come out and the blood of the 1% turns the streets red.

      • Richard Weber

        I am with ya pardner! But it does hurt many more than it helps. You are right these are Cadillac plans given out, because the people who do the negotiating are in the same boat as the people who are at the receiving end, kind of a sweet deal! A committee of Taxpayers not involved with local government should be doing the negotiating, then something fair could be hammered out. But definitely no bennies for part timers, just not done anywhere that I have ever heard of.

      • KaayC

        We’re late.

      • Scott

        The 1% keep saying it. It must make people feel good to say “Let’s get the 1%”, I have heard people saying it for years. It’s also always good in “turn the streets red”. Now the problem is solved!

      • SoWhat?

        J W , you do know that The Obamas, the Clintons including Hillary, most US Senators , all of the tech CEO’s like facebook, Apple, google and most professional athletes and entertainers are 1% people.

      • Deport all illegals now

        Pathetic. The top 10% already pays 90% of the taxes. Socialist fool.

      • J W

        They also control 99% of government welfare and expecteven more. Entitled robber barons and their judases!

  • Smokin

    Why would anyone willingly take a lesser policy and coverage…what’s the deductibles 500..or 1000..per person…raise them like the rest of us to 2500..or 3000…and have them pay more for coverage …stop the Cadillac plans…

  • Practical

    The reality is that large corporations have made their employees pay a hefty premium for their cadillac plans. The town should do the same. Public employees need to realize that the freebies are gone.

    • Deport all illegals now

      The employees should be forced to pay more into their plans. It’s called the real world. Stop crying and do what everyone else in the real world has to do.

  • SoWhat?
  • jwblack

    So instead of trash talking what are we going to do about this? How about giving up hte township, give up all townships in Ocean County and combine them together so we have buying power. Brick section of Ocean County. Think of all the savings. One school administrator, one chief of police, one dpw etc…

    • J W

      I’ve been saying this for years and people hate it. Local feudalism will never die in NJ.

    • Spell Check

      How would Lakewood contribute to that plan. They are causing a local government chaos of buses what would they pay in a share of a county tax haha nothing.

      • J W

        With the rest of the county suddenly able to outvote them, the endless developmentthere would at least stop. No more rezoning ag lots for residential. No more high density. No more yeshivas every other door with tax exemptions. The majority government would be normal, not religious fundies.

      • Spell Check

        They wouldn’t pay this is your argument they would sue the county saying they are racial suppressed to one area like a segregation zone and demand they get a bigger footprint. Your ideas make no sense. If Lakewood was given to Monmouth county I’d say the plan is alright

      • J W

        Zoning is a peculiarly despotic power granted to local governments in this state and country. They could sue, but I’d bet $1000 that they’d lose. The Yeshiva issue though is one they might win on, but if one county of decent and sensibly secular people could stand up to a looming hoard of fundamentalist barbarians, the worst excesses would be avoided. There are 80k Orthodox in Lakewood and maybe 500k normal people in this county. Do the math. There’s a reason guys with names like Lacey and Mancini end up as Freeholders in this county instead of Greenstein, Silverstein, Goldstein, or whatever.

  • Deport all illegals now

    Obamacare. The gift that keeps on giving.