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

As passed, the Affordable Care Act (ACA) included a provision that would have imposed a 40 percent excise tax on the cost of coverage that exceeded certain dollar thresholds. The tax was highly unpopular with both employers and employee groups, and after delaying its effective date several times, Congress finally repealed the so-called Cadillac Tax in its entirety in 2019.

Additional Information

Government Funding Agreement to Fully Repeal Three Taxes Enacted as Part of the Affordable Care Act
     On December 17, 2019, Congress reached a government funding agreement that includes language to fully repeal three taxes enacted as part of the Affordable Care Act (ACA): the Cadillac Tax, the Health Insurance Tax, and the Medical Device Tax.

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.