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.
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).