December 22, 2015
With the new spending bill came welcome news for many employers. On Friday, December 18, 2015, President Obama signed the new tax and spending bill into law. Within the spending bill was a two year delay to the Affordable Care Act’s Cadillac tax provision, and instruction to the Comptroller General to review the benchmark used to determine the value of plans to be taxed (See §101 Consolidated Appropriations Act of 2016 H.R. 2029).
The Cadillac tax has been the subject of much controversy due to how it is determined. The Cadillac tax levies a 40% excise tax on employer health plans that are considered generous. The Cadillac tax would have applied to employer provided health plans with a value of $10,200 for an individual and $27,500 for a family.
Originally slated for implementation in 2018, the two year delay extends the implementation of the Cadillac tax until 2020. It is unknown what will happen to the Cadillac tax between now and 2020. Clemans Nelson & Associates will continue to monitor the Cadillac tax and provide updates on new developments.