A look at who pays when health-care tax hikes kick in

A look at who pays when health-care tax hikes kick in

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When: 2013

"Cadillac" plans

Who pays: Insurance companies or businesses that provide plans with premiums of more than $10,200 per person or $27,500 per family, not including dental or vision coverage. Employees covered by these so-called "Cadillac" benefits probably will feel the pinch.

How much: 40 percent excise tax on any amount of premium that exceeds the threshold. Expected to raise $111 billion over five years.

The lowdown: The majority of health plans aren't affected because they don't cost enough: Workplace family coverage now averages about $15,000, including the portion paid by the employer, according to the Kaiser Family Foundation's survey.

But some middle-class workers, especially those with strong union contracts, have health plans that exceed the threshold. Also hit are corporate bigwigs whose employer-paid plans cover virtually all expenses and lots of perks, akin to tax-free income.

Some employees will pay more for their share of insurance costs because the tax will get passed along to them. In other cases, businesses will trim benefits to bring their plans under the tax cutoff.
Economists predict that many of the affected workers will get higher pay as a trade-off - but those raises would be subject to income tax.

The tax will affect more workers as time goes by. It's indexed for inflation, but rising health-care prices will probably outpace that.
When: 2018.