Cadillac tax on healthcare delayed for two years

•Cadillac taxê on healthcare delayed for two years

As part of the $1.8 trillion budget bill that was passed by Congress before they left town for the holidays, the –Cadillac tax” on healthcare was delayed for two more years, until 2020.

The Cadillac tax is a 40 percent excise tax paid by employers on a portion of high-cost insurance plans, adjusted annually to the Consumer Price Index. But because medical inflation greatly exceeds overall inflation, the number of plans to which the tax applies would quickly grow. Estimates are that it would apply to as many as one-quarter to one-third of health insurance plans in 2018.

The tax has already been delayed once, and some observers believe the current delay is a sign that eventually, the tax will be repealed. There is opposition to the tax on both sides of the aisle. Others argue that repeal would add to the federal deficit.