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Cadillac Tax Delayed To 2022

On January 22nd, 2018, President Trump signed a stopgap funding bill that delayed the implementation of the ‘Cadillac Tax’. This new law has officially delayed the Cadillac Tax until 2022.

Background

A provision of the Affordable Care Act (“ACA”), the so-called “Cadillac Tax” is a 40% excise tax to be imposed on high-cost employer-sponsored group health plans. The tax is expected to impact at least 1 in 4 employers. Self-insured employers are expected to pay the tax directly while insurance carriers will be responsible for the tax on fully insured plans.

In short, ACA imposes a 40% excise tax on any “excess benefit” provided to an employee over the applicable dollar limit for the employee for the month. To date, the threshold ‘dollar limit’ amounts have been set at:

  • $10,200 for individual coverage and

  • $27,500 for family coverage.

Under the newest law, this Cadillac tax, in its entirety, will not take effect until at least 2022. Need questions answered, feel free to reach out to us at hello@hr-cubed.com.

#HR #ERISA #ACA #CadillacTax

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