On Monday, President Trump signed a stopgap funding bill delaying the implementation of the Cadillac Tax until 2022.
A provision of the Affordable Care Act, the Cadillac Tax is a 40 percent excise tax imposed on high-cost employer-sponsored group health plans. The tax will expect to impact at least 1-in-4 employers. Self-insured employers are expected to pay the tax directly, while insurance carriers will be responsible for the tax on fully insured plans.
In short, the Affordable Care Act imposes a 40 percent excise tax on any “excess benefit” provided to an employee over the applicable dollar limit for the employee for the month. To date, the annual threshold dollar-limit amounts have been set at $10,200 for individual coverage and $27,500 for family coverage.
Under the new law, the Cadillac Tax, in its entirety, will not take effect until at least 2022.
Let Plexus lend a hand
Have questions regarding today's Alert or other employee benefits matters? We can help. Contact a Plexus benefits client service team member in Deer Park, Ill. (847.307.6100), Chicago (312.606.4800), Dallas (972.770.5010), or Oklahoma City (405.840.3033).