Download PDF

Cadillac Tax Ruining Health Care Coverage Plans

1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Post Views 0


Summary: Obamacare’s Cadillac Tax is a substantial tax that every company is going to try to avoid having to pay. Some of the steel companies have already been forced to lock-out workers when contracts to avoid the tax weren’t agreed upon.

There are countless stories of how Obamacare has affected individuals and businesses negatively. One specific story is from Allegheny Technologies.

The specialty metals producer was forced to lock out 2,000 union workers because the company and the union, United Steelworkers, were unable to agree on a contract that expired at the end of June. The proposed contract was to last until 2018, the same year the “Cadillac Tax” begins.

This Obamacare tax will force companies to pay 40 percent excise tax on healthcare coverages that exceed $10,200 for individuals or $27,500 for families. The IRS has also clarified that employers will likely pay more than 40 percent because of income-tax reimbursements.

Allegheny Technologies offered a provision that would allow them to reenter into negotiations if the company’s increasing premiums would put them into the Cadillac Tax category. They also proposed a number of steps to avoid reaching that level of tax payments like switching plans so that workers would have to pay higher deductibles. The plan would also have required workers to gradually increase their out-of-pocket maximums of family coverage from $3,000 to $6,000.

United Steelworkers represents many other steel producers like U.S. Steel, whose contract expires September 1. There is a good chance of lockouts happening here if exemptions for Cadillac Tax are not included in the new contracts.



Cadillac Tax Ruining Health Care Coverage Plans by
Authored by: Amanda Griffin