One feature of the Patient Protection and Affordable Care Act (PPACA) that didn’t receive much attention when the PPACA first went into effect in 2010, but that is now becoming of significant concern to most employers, unions, and employees, is the “Cadillac tax.”

The “Cadillac tax” is a 40 percent excise tax on employer-provided health insurance plan premiums that exceed $10,200 for individuals and $27,500 for families. The original idea of the tax was to act as incentive to employers to avoid high-cost plans. And, as originally designed, the tax was expected to be able to generate about $87 billion over ten years to help fund the PPACA, and also drive down the costs of health insurance by urging employers to be more cost-sensitive to the benefits that they offer to their employees.

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