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Journal Article
Research Support, Non-U.S. Gov't
Affordable Care Act's Cadillac Tax Could Affect One-Fourth Of Workers With Employer Health Coverage By 2025.
Health Affairs 2018 April
The excise tax on high-cost health insurance plans (known as the Cadillac tax) under the Affordable Care Act (ACA) is an important part of the law's attempt to control rising health care costs. Analysts using different data sources have come to divergent estimates of how many people would be affected by this tax. We used the National Compensation Survey from the Bureau of Labor Statistics, which is better suited to this analysis because of its law-relevant details on employer-provided health benefits. Our research clarifies an important area of empirical uncertainty, thereby informing the debate about the ACA and its proposed replacements. Our base estimate of impact, 12 percent of workers participating in employer-provided health plans in 2020, lies in the middle of other estimates, but it is considerably more comprehensive, accurate, and delineated by worker characteristics (region, number of employees at the firm, industry, occupation, and so on) than others. Workers affected at the highest rate include those in education occupations and high-income workers, while those in industries involving manual labor and public safety are affected at some of the lowest rates.
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