High-End Health Plans Scale Back to Avoid 'Cadillac Tax'

Source: New York Times

Say goodbye to that $500 deductible insurance plan and the $20 co-payment for a doctor’s office visit. They are likely to become luxuries of the past.

... Then blame — or credit — the so-called Cadillac tax, which penalizes companies that offer high-end health care plans to their employees.

While most of the attention on the Obama administration’s health care law has been on providing coverage to tens of millions of uninsured Americans by 2014, workers with employer-paid health insurance are also beginning to feel the effects. Companies hoping to avoid the tax are beginning to scale back the more generous health benefits they have traditionally offered and to look harder for ways to bring down the overall cost of care.

... But one critic pointed out that employers have been raising deductibles and asking employees to contribute more for many years. Tom Leibfried, a legislative director for the A.F.L.-C.I.O., one of the unions whose plans are vulnerable to the tax, says the demands that workers pay more for their care is a perennial aspect of labor negotiations. “We’re very concerned about the hollowing out of benefits in general,” he said. “What the excise tax will do is just fuel that.”

Read more: http://www.nytimes.com/2013/05/28/business/cadillac-tax-health-insurance.html