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Buried in the January 22 passage of legislation to re-open the federal government was a welcome bit of news for employers: The effective date of the wildly unpopular “Cadillac Tax” has been pushed back yet again. It is now set to take effect in 2022 rather than 2020 (the original implementation date was January 1, 2018).
The Cadillac Tax was established to help fund healthcare reform and reign in unnecessary spending by imposing a 40% excise tax on insurers of employer-sponsored health plans with total values that exceed $10,200 for individual coverage and $27,500 for family coverage.
The tax constituted a large part of the funding for the Affordable Care Act (ACA). Given that the future of the ACA itself remains uncertain, the ultimate fate of the Cadillac Tax is equally up in the air.