Cadillac Tax Delayed For Two More Years, Saving Companies And Employees Millions
The short-term spending bill that Congress passed this month also included a provision that delayed the so-called “Cadillac tax” on high-value employee health care plans. The Metals Service Center Institute (MSCI) has opposed this tax since it was put into place with passage of the 2010 Affordable Care Act. The levy will now take effect beginning on January 1, 2022 instead of January 1, 2020.
Employers would be responsible for paying the tax, making it more difficult for them to provide comprehensive health insurance packages to their employees. To illustrate:
- The 40 percent tax eventually will apply to health insurance plans that cost more than $10,200 per individual or $27,500 per family.
- If a company provides individuals working for it with plans that cost $12,000 annually, the employer would pay a $720 tax for every employee who receives that plan.
Lawmakers on both sides of the aisle have expressed opposition to the tax, as has a broad swath of stakeholders, from labor unions to corporations.
The National Association of Manufacturers estimates that more than three-quarters of employers eventually would have to pay the levy, implementation of which has been delayed by Congress on two other occasions. NAM also has said the tax could cut overall employment by 2.6 million jobs and could reduce household income by $3,800 annually.