Consumers Getting Hit by Obamacare 'Cadillac Tax'

Thursday, 14 Aug 2014 08:20 AM

By Melanie Batley

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Large companies that provide generous health insurance plans are finding ways to shift the costs to their employees in anticipation of Obamacare's 40 percent 'Cadillac tax,' according to a report by Fox News.

A national business group said it is seeing employers shift workers into plans with higher deductibles while making use of health savings accounts to offset the additional costs of the tax. Some are also increasing premiums for spouses who have access to other health insurance plans, while others are cutting benefits altogether.

"The excise tax, when it hits in 2018, will affect both employers and employees," Brian Marcotte, president of the National Business Group on Health, told Fox News.

The tax was estimated to earn the Treasury $80 billion over ten years to help defray the costs of Obamacare. But analysts are now suggesting that the revenue will be lower as companies find ways to avoid the tax, undermining the administration's plans to have the new healthcare program fund itself.

The tax will affect companies that spend more than $10,200 on health insurance per employee.

Henry Aaron of the Brookings Institution said, "It's expected that most businesses that offer that form of insurance will back off and make the insurance less generous, so the tax won't bite."

"What we're finding is almost no employers are going to be hit by this 'Cadillac tax.' You'd be stupid to get hit by this 'Cadillac tax,'" Robert Laszewski of Health Policy and Strategy Associates, told Fox News.

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