Obamacare ‘Cadillac Tax’ to Hit 1 in 4 Employers That Offer Health Care Benefits

Obamacare’s “Cadillac tax” will hit one in four employers that offer health care benefits, a leading industry analyst says in a report being released Tuesday, socking companies with a massive levy that Republicans and Democrats on Capitol Hill say is unfair to those who have negotiated high-quality plans as part of their jobs.

The Kaiser Family Foundation estimates that 26 percent of companies will be affected by the tax when it takes effect in 2018 and 42 percent of employers will be paying the levy a decade later, signaling just how quickly health care costs are expected to rise — and how valuable the Cadillac plans are.

Kaiser said some employers probably will cut back on the scope of their plans to duck the tax, resulting in coverage with higher deductibles or networks with fewer doctors.

“For the most part, these changes will result in employees paying for a greater share of their health care out-of-pocket,” the study authors wrote.

The tax has been controversial from the beginning, when Democrats included it in the Affordable Care Act as a way to wring billions of dollars out of the health care market and use that money to pay for other benefits in Obamacare.