By Jennifer Carsen, JD, Legal Editor
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Get Your Report Now!Santa’s arriving early this year for detractors of the wildly unpopular “Cadillac Tax.” Congress is voting today on a massive $1.1 trillion bipartisan bill, expected to pass, that includes a 2-year delay on the implementation of the tax, from 2018 to 2020. President Obama is expected to sign the legislation.
The Cadillac Tax is designed 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, starting January 1, 2018. The threshold amounts may be adjusted in certain circumstances (e.g., for individuals in certain high-risk professions and for certain group demographics).
This provision, popularly known as the “Cadillac Tax” because it was designed to target expensive health plans, has been controversial since even before the Affordable Care Act (ACA) was enacted. Organized labor has been especially vocal regarding its distaste for the tax, and opposition from both sides of the political aisle has been growing at a rapid pace as it’s become clear that many nonluxury health plans would eventually be affected as well.
The 2-year delay of the effective date of the Cadillac Tax has been heralded by many as a significant first step toward repealing it completely. How that extra revenue would be recouped is not yet clear.
As always, stay tuned to HR.BLR.com® for more details as they unfold.
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 Jennifer Carsen, JD,is a Legal Editor for BLR’s human resources and employment law publications, focusing on benefits compliance. In the past, she served as the managing editor of California Employer Resources (CER), BLR’s California-specific division, overseeing the content of CER’s print and online publications and coordinating live events and webinars for both BLR and CER.
Before joining CER in 2005, Ms. Carsen was a Legal Editor at CCH, Inc. and practiced in the Labor & Employment Department at Sidley & Austin, LLP in Chicago. She received her law degree from the New York University School of Law and her B.A. from Williams College. She is licensed to practice law in New Hampshire.
Questions? Comments? Contact Jen at jcarsen@blr.com for more information on this topic |