What Does the Recent Cadillac Tax Delay Mean for Employers?
The Cadillac tax, which would have gone into effect in 2020, has been pushed back to 2022. This delay provides employers an additional two years to find better cost-management solutions. The medical device tax has also been delayed for two years and the health insurance tax for one year.
Cadillac Tax Basics
- The Cadillac tax is a 40% excise tax on the portion of group health plan premiums above $10,200 for single coverage and $27,500 for family coverage
- The tax is estimated to generate $87 billion in revenue
- If the tax had gone into effect in 2020, nearly 80% of employers would have been affected
- Each year, the number of affected health insurance plans will continue to grow, due to the rate at which health premiums are increasing
1 Cadillac Tax, The Council of Insurance Agents & Brokers