Monday, August 31, 2015
Cadillac tax will affect 13.6% of single premiums in CT in 2018
Under the Affordable Care Act, in 2018 high cost employer-sponsored health plans will begin paying a hefty 40% tax, termed the Cadillac tax, on the value of the plan over specified threshold levels. A new report by the Congressional Budget Office estimates that 13.6% of CT single premium plans and 11.9% of CT family plans will exceed the threshold and trigger the tax. The 2018 threshold levels will be $10,200 for single premiums and $27,500 for family plans, with modifications for some groups. As the threshold levels for the tax will rise every year linked to the rate of general inflation, experts expect the 2018 national percentage of plans subject to the tax to rise from 10.2% single and 6.0% of family plans to double or triple those rates by 2028. Proponents of the tax argue that it serves as a powerful incentive to control health costs, but opponents feel it is unfair to groups with high cost workers or those who negotiated their compensation to favor health benefits. Congress is considering proposals to repeal the tax.