For those who were worried about the Cadillac tax, now is the time to breathe a temporary sigh of relief. While the future tax has not been ruled out entirely, it has been put on hold.
What Is The Cadillac Tax?
If passed, the Cadillac tax would create an astronomical 40 percent excise tax on high-priced health insurance plans. This tax was previously set to take effect in 2018. It will now take effect in 2020 instead and will affect health plans with values higher than $10,200 for individuals and more than $27,500 for families. However, the amounts will be annually indexed for inflation. The tax was originally proposed as part of the Affordable Care Act and has become an integral part of it in every discussion.
For employers, there will be a new sense of certainty about some employer-sponsored benefits and their tax treatments. In addition to this, the new bill allows flexibility and predictability for employers when it comes to extending a comprehensive package of benefits to their workers. This is a major part of attracting and keeping top talent, which is why it was a focus in this measure.
The delay provides relief for employers and gives them more time to plan for it. To learn more about the excise tax or what to expect from it, contact a UBF consultant.
Alan Wang is the President of UBF and serves as the lead consultant. He has delivered the UBF solution set throughout the world and is highly regarded for his areas of expertise. You can follow him on Twitter @UBFconsulting.