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Employers Maneuver to Avoid 40% Obamacare "Cadillac Tax"

Under the Affordable Care Act, a 40% excise tax, starting in 2018, will be assessed on group health care premiums that exceed $10,200 for single coverage and $27,500 for family coverage...
October 22, 2014

Under the Affordable Care Act (ACA), a 40% excise tax, starting in 2018, will be assessed on group healthcare premiums that exceed $10,200 for single coverage and $27,500 for family coverage. A new study by Aon demonstrates that employers are already cutting back on coverage, or are considering doing so, in order to avoid what has been called the Obamacare "Cadillac Tax."

The Aon survey of 317 employers said that among employers that have determined the cost impact of the ACA excise tax, 62% say they are making—effective next year—significant changes to their health plans. For example, one-third are reducing how much their plans will cover, resulting in lower plan costs, but also boosting out-of-pocket expenses for plan participants. In addition, 31% are increasing the use of wellness incentives.

PIA spoke out last year against the "Cadillac Tax" in Obamacare, noting that the new tax will hurt, not help, efforts to encourage better health, and that it is really healthcare rationing in disguise. "All of this railing about 'Cadillac' plans has an undercurrent of class warfare," PIA wrote. "It's like saying that people who have such plans don't deserve them, and employers who sponsor them are somehow denying coverage to the uninsured. This is envy in the form of public policy. The model for healthcare reform should not be Robin Hood." Read the full article here.

"Cadillac Tax": Robin Hood As a Model for Healthcare Reform (PIA Connection 8/2013)

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