DELAY OF CADILLAC TAX

Congress has passed a year end budget deal that will affect three tax provisions of the Patient Protection and Affordable Care Act (ACA).  The Excise Tax on High Cost Plans (Cadillac Tax) will be delayed by two years until 2020.  The Cadillac Tax is a 40% tax imposed on the cost of employer-sponsored health coverage exceeding certain limits: originally for 2018, generally $10,200 for self-only coverage and $27,500 for family coverage.  Many reports show that the majority of employer sponsored health plans would be affected by the tax within the first 5 years, and employers have expressed concern over the effect the tax would have on the cost of health benefits. The legislation also makes the tax deductible for employers, further reducing the cost burden of the tax. 

The medical device tax, which has already gone into effect, will also be suspended for two years in 2016 and 2017, and the health insurance providers fee imposed on insurers will be lifted for one year in 2017. 

For additional information on the "Cadillac Tax" and other Affordable Care Act requirements, please visit www.HCReducation.com.