Business, education and labor union lobbyists may hold the keys to the Cadillac tax.
The Caddy tax remains one of the more controversial elements of the Patient Protection and Affordable Care Act. It requires employers that offer “rich” health plans to some or all employees to pay a tax on the “overage” as defined by the law.
In an article for Politico, author Brian Faler reports growing concerns among unions and employers about what the tax may cost them when it’s triggered in 2018. Strong Obama supporters such as the National Education Association are calling for its repeal.
Opposition has swelled as plan managers have begun applying the Cadillac tax formula to their own plans. Now, more plans appear to fall in the Cadillac category. Health insurance plans covering hundreds of thousands of workers will be affected.
“‘Cadillac tax’ is really a misnomer,” said Beth Umland, director of research for health and benefits for the consulting firm Mercer. “Potentially any employer could be hit by this tax.”
The White House told Politico it’s standing by the tax.
“This provision is one of several in the ACA designed to promote fiscal responsibility and slow the growth of health care costsea,” said White House spokeswoman Jessica Santillo.
Yet the tax stands out as among the few components of the act that both liberal and conservative interests are opposed to. As the 2018 deadline approaches, Politico predicted, efforts to revise or kill it will increase.
Then the question arises: How to plug the $87 billion PPACA funding gap the tax is designed to fill? For that, no one has so far offered a clear proposal.