Another bill has been introduced to repeal the least popular tax on everyone’s radar. S. 2045, recently introduced by Sens. Dean Heller, R-NV, and Martin Heinrich, D-NM, would repeal the Excise Tax on high-cost health coverage, also known as the “Cadillac Tax.” Effective on January 1, 2018, it imposes a 40% excise tax on plans that exceed a certain premium cost threshold. For 2018, the thresholds are $10,200 for self-only coverage and $27,500 for family coverage but may be increased based on several adjustment factors.
S. 2045 joins two separate measures introduced earlier this year to repeal the tax – H.R. 879 and H.R. 2050. Despite a consensus among many employers, unions and insurers that the tax should be repealed or modified, it remains to be seen if any of these measures will progress through Congress. One purpose for the Excise Tax is to fund the costs of the Affordable Care Act and repeal would mean additional funding would need to be found elsewhere. Rather than repeal, it’s possible we’ll see tweaks to the legislation that may lessen its impact a bit.