Health Care Reform Website

Excise Tax on High-Cost Coverage – “Cadillac Tax”

A 40 percent excise tax will be imposed, beginning in 2022, on the cost of coverage that exceeds certain dollar thresholds.The limits are $10,200 for individual coverage and $27,500 for family coverage but thresholds for pre-65 retirees and high-risk employees (police, firefighters, EMTs, etc.) are $11,850 for individuals and $30,950 for families.

Included in the cost of coverage are employer and employee contributions toward premium, including medical, prescription drug, behavioral health, chiropractic, Employee Assistance Programs, on-site clinics, employer and employee contributions to health Flexible Spending Accounts, employer contributions to Health Reimbursement Arrangements, and employer and pre-tax employee contributions toward Health Savings Accounts.

Additional Information

Cadillac Tax and Other ACA Taxed Delayed Under 2018 Spending Bill
     On January 22, 2018, Congress passed and President Trump signed into law a short-term spending bill to fund the federal government through February 8, 2018. As part of the spending bill, three Affordable Care Act (ACA) taxes have been delayed or suspended.

New Spending Bill Means Changes to ACA Tax Provisions
     On December 18, 2015, Congress approved and President Obama signed a $1.1 trillion spending measure for the federal government that includes significant changes to several tax provisions in the ACA.

Excise Tax on High-Cost Employer Health Plans
     This Briefing provides an overview of the “Cadillac Tax” along with some possible strategies for minimizing the impact of the tax.