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Public employees oppose ACA’s Cadillac tax

While there are many provisions in the Affordable Care Act under scrutiny by state lawmakers and public workers, unions are directly opposing the Cadillac tax’s disruption to state employees’ insurance benefits. 

The New York Times reported school districts and local governments are urging public worker unions to find a way to provide cheaper benefits to employees to comply with the ACA’s so-called Cadillac tax. The tax was inserted into the ACA after financial experts cited health insurance with low employee contributions would desensitize workers to the cost of healthcare. If a public employer or union does not adhere to ACA guidelines and reduce their plans below a certain threshold, they will be subject to a 40 percent tax on premiums.

According to the newspaper, the tax is not set to start until 2018, but many public employers are asking their unions to switch to more affordable plans to prevent increased taxes.

According to Forbes, some prominent public-sector unions are searching for ways to reduce their health insurance plan costs to make them more affordable and avert the Cadillac tax. The news source reported that many unions directly oppose the tax because it goes against many of the benefits that unions offer public workers. 

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Erin Woulfe
Erin Woulfe
Erin Woulfe likes to write about things that matter. Keeping her finger on the pulse of what’s happening in the public sector world, she blogs about the latest legislative news and employee benefit trends that affect our school, city and county clients. She’s been with NIS since 2002. “I love connecting to our clients and providing them with the tools they need in order to administrate their plan,” says Erin. “Whether that be materials to educate their employees on certain benefits, how to effectively communicate change within an organization or just providing tips and how-to’s to help them make their job easier.”

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