Wednesday, December 2, 2015

Repeal of the "Cadillac Tax" under ACA

The Cadillac tax is slated to take effect in 2018 for individuals with health insurance plans worth more than $10,200 a year or families with plans worth more than $27,500. That's $850 for an individual plan and includes other things like Employer HSA contributions, Employer HRA Contributions, Wellness plans, pre-tax policies for specific disease or illness plans (Cancer Policy). The tax itself is a 40% non-deductible excise tax on any amount above these thresholds.  Under the tax, those plans that are fully insured, employers calculate and insurers pay the tax, for Self-funded plans, the employers calculate and "the person who administers the plan benefits" pays and under HSA's and HRA's Employers calculate and employers pay.

The tax was included in the law to curb the highly comprehensive, highly expensive health plans as well as help raise funding for the ACA, an estimate 87 Billion over the next ten years.

Now that we are getting closer to point of impact, even democrats are no longer supporting the tax because it's not really a tax on "Cadillac Plans" but many mid-level plans simply because of the rising cost of health care.

"The 'Cadillac Tax' will raise barriers that would deprive patients of needed cancer screenings, diagnostic tests and lifesaving treatment," said Rep. Joe Courtney, D-Conn., who is the sponsor of a House bill to repeal the tax.  "We must repeal this onerous tax before it diminishes the progress we have made since enactment of the ACA."