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.