I have been hearing a lot more talk about this "Cadillac tax" on some health insuarance policies. I found an article about it, but, don't really understand how we figure out if we have a "Cadillac" policy.

Can anyone explain this in plain and simple terms?

Health Care Reform: Pelosi Faces Debate on Insurance Tax - TIME

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My understanding is that the unions cried foul when it became clear that the amount an employer spends on your benefits would be counted as taxable income. If you've got a health insurance policy that costs $25K/year - one of those policies that have little to no deductibles, etc. - then suddenly your income on your W-2 would show a $25K increase, and you'd be taxed at that rate, and probably even find yourself in a higher bracket.

The union leaders said, "Hold on! A tax on that $25K equals thousands of dollars, and you can't just spring that on people! They didn't get a raise or anything, but will suddenly have to find extra money to pay that new tax. We won't give you our financial backing if you keep that tax in there, as is."

So congress and the administration said, "Okay, if you have an expensive policy, we won't make you pay taxes on benefits until 2018."

The unions said, "Whew. Okay. Game on!"

Meanwhile... if you make $30K-$50K and your employer pays $10K towards your bennies, you suddenly appear to be making $40K - $60K and are taxed at that rate. No special government breaks for you! You make less to begin with, probably have less disposable income to begin with... and yet your taxes will go up, but the higher-paid union workers will see no increase in their tax bill.

The threshold for "cadillac" is a question mark to me.

I don't think any of us - union or otherwise - should incur this new tax.

I am so sick of this boondoggle. If we are going to be taxed then instead of our employers providing insurance we should be paid the cost they are paying in cash so we can decide how to allocate the funds. If we're being taxed on it like it's cash then we should receive cash.
Someone said in another thread it's like paying an everlasting mortgage payment and that's what it amounts to. Behind closed doors like we are stupid children too dumb to hear and give input on our futures. And yet we are expected to pay out the nose for it. Even though of us who have our own insurance will have to pay for everyone else to have insurance whether they are morbidly obese from eating fried fast foods and never move a muscle, whether they smoke through a hole in their neck and whether they smoke crack and shoot up meth. I so hope a miracle happens and it doesn't pass.

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The political system is broke and it's a joke.