The budget deal passed by Congress and signed by President Obama last week suggests that Republican opponents of the Affordable Care Act “may be able to get more by chipping away at it than trying to take the whole thing down at once.” The legislation delayed the “widely criticized” Cadillac tax for two years (from 2018 to 2020) and suspended the medical device tax and the health insurance tax.
- The delay of the Cadillac tax pushes back a non-deductible excise tax of 40% on health plans that exceed established annual premium cost maximums for single, two-person and family coverage.
- The tax is 40% of the cost of health coverage that exceeds these predetermined threshold amounts.
- Cost of coverage includes the total contributions paid by both the employer and employees, but not cost-sharing amounts such as deductibles, coinsurance and copays when care is received.
- For planning purposes, the thresholds for high-cost plans are currently $10,200 for individual coverage, and $27,500 for family coverage.
- These thresholds will be updated for 2018 when final regulations are issued and thereafter indexed for inflation in future years.
- The thresholds will also be increased:
- If the majority of covered employees are engaged in specified high-risk professions such as law enforcement and construction, and
- For group demographics including age and gender.
- For pre-65 retirees and individuals in high-risk professions, the threshold amounts are currently $11,850 for individual coverage and $30,950 for family coverage.
Go to main navigation