Under the Affordable Care Act, a 40% excise tax, often referred to as a “Cadillac tax”, was originally scheduled to apply for tax years beginning after 2017. This Cadillac tax was to be levied on the “excess benefit” provided to an employee by an employer-sponsored group health plan. If and when this Cadillac tax goes into effect, each employer will need to calculate the amount of the Cadillac tax. Depending on the type of plan, the Cadillac tax might be an obligation of the health insurance issuer, the employer or the plan administrator.
But not so fast. On January 22, 2018, President Trump signed into law H.R. 195 (the “Act”). Among other things, the Act ended the government shutdown and funded the federal government through February 8, 2018. But the Act also suspended several Affordable Care Act taxes including the Cadillac tax.
The Cadillac tax has now been suspended again and will not apply until tax years beginning after 2019.
If you would like to know more about the Act, the Affordable Care Act or other matters related to employee benefits or healthcare, please contact Jeff Senney at firstname.lastname@example.org or Matt Stokely at email@example.com call 937-223-1130.