Support in Congress has been growing for a repeal of the Cadillac tax under health care reform.
The Cadillac tax is a 40%, non-deductible excise tax on high cost health coverage. The tax is assessed on the amount by which the monthly cost of an employee’s health coverage exceeds a certain amount set by statute. Insurers will pay the tax for insured plans and plan sponsors will pay the tax for self-funded plans. In either case, it is likely that the cost will be passed along to employers and ultimately participants. The tax goes into effect in 2018.
A bi-partisan bill was introduced in the U.S. House of Representatives to repeal the Cadillac tax. The bill has wide support, but would have to pass the House and the Senate and be presented to the President for signature. Stay tuned.