Be prepared for Cadillac tax on health care plans in 2018
A future provision of the Affordable Care Act (ACA) that could affect dealers is the so-called Cadillac tax on expensive health insurance plans. Starting in 2018, employer-sponsored health insurance plans will be taxed if they are valued above a certain threshold.
The amount is $10,200 for individual plans and $27,500 for family plans and will be adjusted for inflation every year. Any value over that amount will be taxed at 40 percent.
The Kaiser Family Foundation estimates that 26 percent of employers nationwide would be subject to the tax for at least part of their health plans in 2018 assuming a five percent annual increase in premiums between now and 2018. WANADA believes the percentage of affected dealers would be somewhat lower. Dealers should ask themselves whether they have a very expensive health insurance plan that could be subject to the tax. In 2018 assuming a 5percent annual increase in premiums between now and 2018.
The tax is one of the more controversial elements of the ACA. Many believe the provision will be overturned by Congress, as there is bipartisan support for doing so. But other members of Congress would likely try to block repeal because the tax does provide revenue to pay for other aspects of the ACA that are already in place.
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