The U.S. Senate Votes to Revoke Obamacare's Cadillac Tax

EAST BRUNSWICK, N.J. - Dec. 4, 2015 - PRLog -- This past Thursday, the Senate voted to revoke Obamacare’s Cadillac Tax on high-priced health care plans. The Obama administration argues that the tax will fund Obamacare and help drive up health cost growth. Supporters of the tax claim that it provides employers with an incentive to support payment reforms that will ultimately reduce healthcare costs. They also claim that it can help boost cost-sharing from employees. As a result, it gives employees more flexibility when seeking affordable health care. Obamacare rivals argue that the Cadillac Tax will inflate out-of-pocket expenses and deductibles like never before.

What is the Cadillac Tax?

In 2018, any health insurance plan that exceeds premiums of $10,200 annually (individuals) and $27,500 (families) will be hit with the Cadillac tax.

"So, if an individual plan costs $15,000, the employer will be required to pay up to 40 percent. In this scenario, the amount exceeds the limit by 4,800. As a result, the employer will be required to pay 40 percent of $4800 - that's equal to $1920 per plan,” says Pishoy Fahmi, CPA, from P.N.F. Certified Public Accountants & Healthcare Advisors.

Prior to the senate delay of the tax, many people were up in arms over the tax bill because they feared that when the tax passes on to employers, it will eventually trickle down to the employees. Many also claim that the tax could persuade employers to provide more affordable health insurance with less coverage.

According to Forbes, there are three main reasons why this tax was enforced. For one, it is supposed to help reduce employee incentive to "overuse services encouraged by these high-cost plans." It minimizes the employer's incentive to "overspend" on health plans. Plus, the tax will help fund the Affordable Care Act.

About P.N.F. Certified Public Accountants & Healthcare Advisors

P.N.F. provides an array of services, such as tax, accounting, auditing services and business advisory services for companies within the health field. The company caters to clients in New York and New Jersey. To learn more information about the company’s accounting practice, contact P.N.F. Certified Public Accountants & Healthcare Advisors at: (732) 605-1529 or visit them online at: http://www.pnfcpa.com.