Nightly News   |  November 25, 2013

Employers cut health benefits to prepare for ‘Cadillac’ tax

Even though the excise tax on generous employer-provided health plans doesn’t take effect until 2018, it is already having an impact. In some cases, it’s causing benefits to be reduced. NBC’s Lisa Myers reports.

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>>> about the fine print in the president's new health care plan. tonight it is about the 75 million or so americans who get health insurance through large employers. during this traditional insurance enrollment period, as you may know, some folks have been surprised to see some out of pocket cost increases they weren't expecting in part because of the t new law. tonight lisa myers explains why.

>> reporter: when billy and aaron baker and their kids got their insurance information this year. they were pleased their premiums will go up only $4 a month next year. they were shocked to discover they are getting less coverage for their money. their deductible went from zero to $1,000 with a $2,500 out of pocket maximum.

>> i look at it and say, what's going on? why is it getting worse and why are we having to pay more?

>> reporter: hip surgery which cost billy only $375 this year would cost as much as $2,500 if she had waited until next year. aaron's employer wrote the changes are needed to avoid the excise tax imposed by the health care law . it's known as the cadillac tax and hit it is most generous health plans beginning in 2018 .

>> saying your insurance is too good, so we are going to give you a penalty. it's outrageous to me.

>> reporter: a survey of businesses which employ more than 20 million americans found 60% said the looming tax is having a moderate or significant influence on benefits. the cadillac tax is designed to make companies and workers more cost conscious. the thinking is that if workers have to pay more expenses themselves they will avoid unnecessaun necessary procedures and that will bring down health costs . the president's top economic adviser says the tax will only hit a small percentage of plans and four years from now. when employers notify workers they are saying one of the reasons for greater out of pocket costs is the new health care law .

>> i don't see that at all. nothing in the law tells you that you need to raise copayments or deductibles. in fact, the law limits your ability to shift costs to the worker.

>> most employers are looking forward to the cadillac tax in 2018 and realizing they will have to get ready for it now.

>> reporter: employers have been asking workers to pay more for years, even before the new law. it's causing anxiety for the bakers.

>> this is what next year will bring? what are the following years going to bring.

>> reporter: lisa myers , nbc news, washington.