Washington (CNN) – Congressional Democratic health care negotiators, working with the White House, have reached a tentative deal with labor unions on restructuring a tax on high-end insurance plans, a key proposal to pay for health care reform, according to two sources familiar with the fast-moving talks.
The "Cadillac tax" is one of the major issues dividing House and Senate Democrats, who have been in intense negotiations with Obama administration officials at the White House over the past two days. Labor union leaders were instrumental in the bargaining, attending multiple separate meetings all week at the White House and on Capitol Hill.
Labor officials are trying to protect workers currently receiving high-cost plans from their employers. Over the years, many unions have negotiated generous health benefits - sometimes in lieu of wage increases.
Under the outline currently being discussed, which the sources stressed is still fluid, the threshold for the tax on insurance plans would be raised above what passed the Senate - which was a tax on insurance plans costing $23,000 and up for families.
In addition, health care policies for state and local workers and health care policies negotiated by labor unions would not be subject to the excise tax until 2017.
The sources also say a working idea is to remove dental and vision plans from the calculation.
One of the sources familiar with negotiations said that in addition to protecting health plans negotiated under collective bargain agreements, labor leaders are pushing to expand the deal to exempt health plans for all Americans making under $200,000 a year.
AFL-CIO chief Richard Trumka has made looking out for all workers - not just union members - a big part of his platform.
In an effort to ensure that the tax doesn't hit more people than currently envisioned, the working outline includes a mechanism to adjust the threshold for the tax upward in 2013 to avoid an automatic expansion. This is aimed at addressing a concern of many House Democrats that the tax on insurance plans could end up like the alternative minimum tax, which was intended to target upper-income taxpayers but, because of the way it was structured, eventually hit some middle class workers.
House Majority Leader Steny Hoyer said negotiators are working to get agreement on overall health care package by the end of this week.
"That's been the goal. But it's a goal, it's not a deadline," Hoyer said.
A senior leadership aide said Democratic leaders and White House officials want to send the bulk of the package to the Congressional Budget Office soon, even as soon as the end of this week. This aide said the controversial issues of abortion and immigration likely would not be resolved by then. Because these issues have no impact on cost of the bill, details on these can be worked out harseparately.