Cadillac Tax Would Lead to Cuts in Health Benefits

December 04, 2009

An independent study released this week finds that the excise tax on higher-cost health plans would adversely impact the middle class by shifting more costs to workers.

Nearly two-thirds of employers say they would make changes to their employees’ health coverage to avoid the so-called “Cadillac tax” included in the Senate bill, taking steps like these:

• 75 percent would raise deductibles or copayments to bring down premium costs.
• 40 percent would add a lower cost health plan as an alternative.
• 19 percent would terminate employer contributions to health or flexible savings accounts.

Another 23 percent of employers say they would maintain current coverage but pass the costs of the tax along to their employees.

Read the complete study on the Kaiser Health News website.