December 22, 2015 Delay of Affordable Care Act’s “Cadillac Tax”
KEEPING YOU INFORMED…
The federal budget legislation signed into law last week contained a provision delaying the implementation of the Affordable Care Act’s so-called “Cadillac tax.” The tax, which was to be implemented effective January 1, 2018, has been delayed to January 1, 2020.
The Cadillac tax imposes a tax on high cost health insurance coverage exceeding a designated threshold. The “high cost” threshold is currently defined as $10,200 for an individual coverage premium and $27,500 for a family coverage premium. Those thresholds will be raised prior to January 1, 2020 and indexed to inflation thereafter.
The tax is 40% of the difference between the threshold and the actual premium. While it is technically imposed on insurance companies, those companies will almost certainly pass the cost along to participating employers.
We will continue to keep you apprised of any further changes to the Affordable Care Act including, but not limited to, the Cadillac tax. Please contact us if you have any questions about this legislation or the Affordable Care Act in general.
THIS MEMORANDUM IS MEANT TO ASSIST IN THE GENERAL UNDERSTANDING OF THE CURRENT LAW. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. THOSE WITH PARTICULAR QUESTIONS SHOULD SEEK THE ADVICE OF COUNSEL.
© Lamb & Barnosky, LLP 2015
 For employers offering health insurance coverage through NYSHIP, the 2016 premiums are $8,345.64 for individual coverage and $20,634.72 for family coverage.