Obamacare's "Cadillac tax" could prompt Fairfax Water Authority to drop coverage

The Fairfax County Water Authority will likely eliminate health insurance coverage for its nearly 400 employees if a controversial tax wrapped up in the Affordable Care Act goes into effect, The Washington Post reported Thursday.

Often called the "Cadillac tax," the section of the Affordable Care Act in question will force employers that provide relatively generous health insurance to pay taxes to the government beginning in 2018. According to the water authority's letter to Virginia's congressional delegation, the new tax would cost $60,000 in its first year and could grow as large as $7 million by 2028.

In his letter to congress, Fairfax Water Authority government relations committee chairman Burton Jay Rubin said the decision would be based not on any political leaning but instead on "cold, hard economic facts."

The Cadillac tax was initially designed to discourage from offering overly-generous health insurance under the theory that plans with low deductibles and low co-payments allow customers to be less cost-conscious when shopping for medical services, which drives up prices for everyone.

Read more from The Washington Post.

{ }