November 02, 2015
Article by Michael Curto, Assurance Services partner, "Can Your Company Afford the Cadillac Tax?" featured in South Florida Hospital News & Healthcare Report.
Beginning in 2018, employers who offer high-cost health plans will face the ‘Cadillac' tax—a 40 percent excise tax levied on individual insurance plans costing $10,200 or more, and family plans costing $27,500 and up.
The purpose of the levy, which applies to the value of the plans above those thresholds, is twofold: first, to give employers and employees an incentive to shift from traditional higher-cost plans to lower-cost policies with higher deductibles, which will discourage employees from using health care services that they don't really need; and second, to help finance the Affordable Care Act (ACA) by generating roughly $12 billion in 2018 and $20 billion in 2019 to pay for the cost of providing health care for the uninsured. According to Congressional Budget Office estimates, the tax is expected to raise more than $87 billion over 10 years.