On Goldman and Cadillac health care plans…

March 23, 2010

One of the big sticking points on the road to President Obama signing the Affordable Health Care for America Act earlier today was the debate over so-called Cadillac health care plans. The Senate bill wanted to impose a hefty tax on these luxe plans and the House bill didn’t, out of some misplaced fear that this would impact teachers and coal miners, instead of top corporate executives. The compromise is that a 40% excise tax will not begin to take effect until 2018, which should hopefully be enough time for Goldman Sachs (GS) to work on reining in its seemingly runaway health care costs for its top executives.

In the preliminary proxy that Goldman filed on Friday, it noted that the cost of premiums for its “executive medical and dental plan” cost nearly $57,000 last year for all but one of its top five executives. Just to put that into perspective, that’s a 40% increase from the premiums that Goldman paid for the top executives in 2008, according to last year’s proxy. Under the new law, a 40% excise tax kicks in for employer-provided plans that cost more than $27,500 a year for a family.

As we’re starting to see in proxy after proxy this season, Goldman is hardly the only company spending big bucks on executive health care. But as we’ve footnoted before, at a time when the average family policy costs $13,375, a policy that costs four times as much hardly seems like it’s worth special protection from Congress. Of course, worrying about teachers and coal miners is a lot more appealing to most members of Congress than worrying about top corporate executives at companies like Goldman.

Image source: Cadillac

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