Obamacare 'Cadillac Tax' Causing Large Companies to Slash Health Benefits

Tuesday, 26 Nov 2013 08:19 AM

By Melanie Batley

  Comment  |
   Contact Us  |
|  A   A  
  Copy Shortlink
Large companies that provide generous health insurance plans to their employees are slashing benefits to prepare themselves for a new Obamacare tax.

Under the new healthcare law, a 40 percent excise tax — referred to as the "Cadillac tax" — will be levied on the most expensive health plans from 2018. The tax kicks in if  a company's annual healthy-insurance cost exceeds $10,200 for an individual and $27,500 for a family.

Editor's Note: Over 50? Check Out These Free Government Giveaways...

According to NBC News, many large employers are already shifting higher premium costs to employees and decreasing benefits in the form of higher deductibles, co-payments, and out-of-pocket limits. In some cases, companies are withdrawing benefits for spouses who have access to coverage elsewhere.

"We've had employers shifting costs to employees for some time. But this is really very different," Robert Laszewski, president of Health Policy and Strategy Associates, told NBC News.

"This is more of a seismic change, because most employers are looking forward to this Cadillac tax in 2018 and realizing they're going to have to get ready for it now. And you can't just shift costs to avoid it. You have to cut benefits."

A survey of Fortune 1000 companies by Towers Watson found that 60 percent of companies said the tax is already having a "moderate" or "significant" impact on benefits decisions for 2014 and 2015, according to NBC News.

The government, however, disputes claims that Obamacare is causing employers to change their healthcare plans.

"There is nothing in the law that tells you you need to raise copayments or deductibles," Jason Furman, White House economic adviser, told NBC News. "In fact, the law limits your ability to shift costs to your workers… For the most part, very little will change for people getting their insurance through large employers.

Editor's Note: Over 50? Check Out These Free Government Giveaways...

Related Stories:

© 2014 Newsmax. All rights reserved.

  Comment  |
   Contact Us  |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Zip Code:
Privacy: We never share your email.
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Democratic Pollsters: Obama Hurting Hillary's Chances

Sunday, 23 Nov 2014 21:52 PM

Two Democratic Party pollsters say President Barack Obama is hurting Hillary Clinton's presidential chances in 2016. . . .

Important Medicare Changes for 2015: What You Need to Know

Sunday, 23 Nov 2014 21:13 PM

Millions of seniors will have to dig deeper to pay for their Medicare benefits next year, thanks to rising costs for hea . . .

Report: Israel Considering Military Action Against Iran

Sunday, 23 Nov 2014 19:53 PM

As the deadline for nuclear talks between the P5+1 powers and Iran looms on Monday, Israel is warning it might use milit . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved