Bumpy Road Ahead for the Cadillac Tax

Posted on Thu, Aug 27, 2015

Bumpy-roadStarting in 2018, the Affordable Care Act (ACA) will impose a 40 percent excise tax on the value of “excess benefits” under employer-sponsored health plans if it is not amended or repealed by then. The stated purpose of the tax is two-fold: to raise revenue to support other provisions of the ACA, and to reduce demand for high-cost employer-sponsored health coverage. This tax, referred to as the “Cadillac tax” or “tax on Cadillac plans,” is based on the theory that excessively generous health plans lead healthcare consumers to overuse their benefits, further driving up the costs of healthcare.
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Tags: Categories: Affordable Care Act, Healthcare, ACA