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Unions Make a Deal on the ‘Cadillac’ Tax

Deal would delay ‘Cadillac’ tax for unions
Unions and local governments would have an extra four years to renegotiate their health insurance plans before being hit by the excise tax on high-cost plans, under an agreement between labor and the White House, several sources say. Agreements on “Cadillac” plans that are entered into before 2013 would be exempt, but they still would be taxed beginning in 2018, regardless of whether they were effective for longer, a GOP lobbyist said.

The taxation threshold for those not lucky enough to get their insurance from a union or local government would remain the same for individuals – $8,900 – and would be bumped up to $24,000 for families. Dental and vision coverage would be excluded from those calculation, which would likely reduce the actual value of plans by $1,500 or more. The threshold would be modified annually by the Consumer Price Index plus 1 percent, the same as the previous Senate proposal.

The cost of the union deal: $50 billion over 10 years, a GOP source says.

The conservative group Americans for Limited Government immediately reacted to the tentative deal. In a letter addressed to House and Senate members from right-to-work states, ALG President William Wilson wrote: “This is absolutely deplorable to American workers, 92 percent of whom do not belong to unions. In essence, non-union employers and employees will be forced to subsidize the cost of exempting union workers from the tax, which will cost families in your states and districts thousands of dollars a year in additional charges.”

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January 15, 2010 - Posted by | Federal Government, healthcare, insurance | , , , ,

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