via Associated Press
WASHINGTON (AP) — Don’t expect to see much relief from rising costs for workplace health coverage under a federal budget deal that postpones a widely feared tax on generous insurance plans, experts say.
The so-called Cadillac tax, the last major piece of President Barack Obama’s health care law, would be delayed two years, until 2020. It was meant to discourage extravagant coverage and help keep costs in check. But opponents including business and labor call it a tax on essentials. Democratic presidential candidate Hillary Clinton advocates its repeal.
Although the tax is still technically on the books, delay would represent a political setback for the White House. Just a few months ago top economic adviser Jason Furman warned that repeal or delay would have “serious negative consequences” for the health care system.
The Cadillac tax is 40 percent of the value of employer-sponsored plans that exceeds certain thresholds: $10,200 for individual coverage and $27,500 for family coverage. In its first year, it would have affected 26 percent of all employers and nearly half of larger companies, according to the nonpartisan Kaiser Family Foundation..