Many Companies Begin Slashing Benefits to Avoid Obama Health Law So-Called Cadillac Tax, Signaling the Beginning of Broader Cuts for All Plans
By Jennifer Popik, JD, Robert Powell Center for Medical Ethics As companies are planning their benefits for the coming year, one controversial part of the 2010 Obama Health Care Law (“ObamaCare”) is again making headlines.
Why might the plans become few and far between? Starting in 2018, there will be a 40% tax on generous employee benefits, on the theory that overly generous plans boost medical costs. The anticipation of this tax is already beginning to have an effect on the plans companies offer.
This so-called “Cadillac Tax” provision does not stand in isolation from the remainder of the 2010 health care law. At the heart of the law is the notion that health care costs rise too fast and that if Americans would just spend less money on health care, then the whole system would somehow benefit.
There is serious concern that soon these plans will be extinct. And as we shall see below, although routinely vilified, the loss of these plans would be very hurtful.
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