Smart Benefits: ACA’s “Cadillac Tax” Delayed
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Monday, December 28, 2015
Rob Calise,GoLocalWorcester Business/Health Expert
On December 21, 2015, President Obama signed into law a budget package that includes a two-year delay for the Affordable Care Act’s controversial “Cadillac tax” that was originally set to take effect on January 1, 2018.
The Cadillac tax – so named because it targets high-cost health plans – would impose a 40% excise tax on the aggregate cost of “applicable employer-sponsored coverage” valued above $10,200 for employee-only coverage and $27,500 for family overage. Each dollar above those thresholds would be subject to the tax, and the thresholds would be indexed for inflation.
According to a recent analysis by the Kaiser Family Foundation, about 1 in 4 employers expected to offer health plans in 2018 would have been affected by the Cadillac tax.
Under the new agreement, the tax would be postponed until 2020, and would become tax-deductible, meaning any taxes paid can be filed as normal deductible business expenses.
Although the White House opposes any repeal of the tax, it appears the tax will remain the subject of intense political scrutiny, in light of the bipartisan support for its delay.
Rob Calise is the Managing Director, Employee Benefits. of Cornerstone|Gencorp , where he helps clients control the costs of employee benefits by focusing on consumer driven strategies and on how to best utilize the tax savings tools the government provides. Rob serves as Chairman of the Board of United Benefit Advisors, and is a board member of the Blue Cross & Blue Shield of RI Broker Advisory Board, United HealthCare of New England Broker Advisory Board and Rhode Island Business Healthcare Advisors Council. He is also a member of the National Association of Health Underwriters (NAHU), American Health Insurance Association (AHIA) and the Employers Council on Flexible Compensation (ECFC), as well as various human resource associations. Rob is a graduate of Bryant University with a BS in Finance.
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