1 in 4 employer health plans could be affected by ‘Cadillac Tax’

Summary: “New projections from the Kaiser Family Foundation estimate that one in four employers (26%) offering health benefits could be subject to the Affordable Care Act’s tax on high-cost health plans, also known as the ‘Cadillac plan’ tax, in 2018 unless they make changes to their plans,” the Kaiser Family Foundation reported. “The analysis also estimates that the share of employers potentially affected by the tax could grow significantly over time — to 30 percent in 2023 and 42 percent in 2028 — if their plans remain unchanged and health benefit costs increase at expected rates. It’s likely that many employers will revise their plans to avoid the tax, at least initially, through modifications that could include reducing options for employees or shifting costs to workers in the form of higher deductibles and other patient cost sharing. The ACA’s high-cost plan tax, which takes effect in 2018, was meant to raise revenue to fund coverage expansions under the health care law and to help contain health spending. It taxes plans at 40 percent of each employee’s health benefits that exceed certain cost thresholds: In the first year, the thresholds are $10,200 for self-only coverage and $27,500 for other than self-only coverage. The thresholds increase annually with inflation.” “Analysis Estimates 1 in 4 Employers Offering Health Benefits Could Be Affected by the ‘Cadillac Tax’ in 2018 if Current Trends Continue,” The Henry J. Kaiser Family Foundation.