Federal Employees' Health Care To Be Taxed Under Obaucus


Posted by Benjamin Pacini on Tuesday, October 13th, 2009, 4:59 PM PERMALINK

The Obama administration’s allies in Congress have a plan to tax “Cadillac plans”—one that  is becoming more and more problematic.

The reason is simple: while the “Cadillac tax” that is in the bill is indexed to inflation, regular health insurance premiums are rising much faster than that; as such, in a few years, most plans will be considered “Cadillac plans.”  That is, not only is this a tax on those who want to have more health coverage, it is a future tax on those who have basic health care.

For example, the most popular option on the market, the Blue Cross Blue Shield Standard Option, will be considered a “Cadillac plan” in 10 years for a family.  For an individual, it will be there in two.  Not only is it the most popular option, it is the option that most federal employees use. 

In other words, the government is going to be taxing the preferred option for thousands of federal employees within the next several years; if government employees will see their insurance taxed within 10 years, how long will it take for your insurance to be taxed?

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