Matt Hollister No Comments

Cadillac Plan Tax Amended

Last Friday President Obama signed H.R.2029 – Consolidated Appropriations Act, 2016, which made a couple of key changes to the “Cadillac Plan Tax”, an excise tax on high cost employer-sponsored health plans.
First, the implementation of the tax has been delayed two years from 2018 to 2020. Second, the tax payment will be a deductible business expense – initially the excise tax was not going to be a deductible expense and therefore more costly for employers.
The Cadillac Tax is an excise tax on the cost of “high cost plans” which are plans that have an premium that exceeds a certain threshold. Currently, the amounts for high-cost plans are $10,200 for individual coverage, and $27,500 for family coverage. These amounts are indexed for inflation and will change.
Opponents of the Cadillac Tax seek a repeal of the law that will cause further pressure on employers who already face a high cost of providing health insurance. Included in the “premium” calculation for Cadillac plans are benefits such as Health FSAs, HRAs, Health Savings Accounts, most wellness plans and of course fully insured and self insured health plans.
Matt Hollister, L.I.A., M.P.H.