The Cadillac Tax is coming, and you need to make some decisions. One of the most controversial provisions of the Affordable Care Act (ACA), the Cadillac Tax, is an excise tax on “rich” health insurance benefits. As of 2018 when the tax begins, “rich” means a value that exceeds $10,200 for self-only and $27,500 for other than self-only.
You’ve probably heard by now that the tax is substantial. For tax years beginning on or after December 31, 2017, companies must pay 40% of the value of benefits over those amounts, with limited exceptions.
The Cadillac Tax is controversial, at least in part, because some believe those figures are unreasonably low. Others see it as an attack on the free market, where individuals and companies decide for themselves which insurance plan is best for them.
No matter the side on which you fall, it appears the tax will take effect on schedule—so it’s best to plan your strategy now.