Many provisions of the Patient Protection and Affordable Care Act (PPACA), commonly referred to as “Obamacare,” are particularly controversial, but one that should be and yet isn’t being discussed is the yet-to-be-enacted penalization of so-called “Cadillac plans.” Basically, the law will require businesses that offer their employees more health coverage than what is prescribed by the law to pay a 40 percent tax on the value of those additional benefits.
If the purpose of the law is to encourage and aid the coverage of health care in America, why does it contain a provision that gives firms a disincentive to offer more than what the law asks them to? This provision will deter businesses from offering some coverage to employees that they otherwise would have, as they won’t be able to afford the heavy, nonsensical tax they are assessed for those benefits.
Supposedly enforcement of this provision will begin in 2016 unless it is repealed. While I don't necessarily endorse a full repeal of the PPACA, this provision will only limit health care for many Americans and remove the only remaining way that firms have been able to use health benefits as a competitive advantage for talent recruitment since the PPACA was passed.
To those wishing to read the provision for themselves, please look up Title 26, Subtitle D, Chapter 43, Section 4980-I of the 2011 Internal Revenue code provisions related to implementation of the PPACA.