In recent weeks, support and momentum among U.S. Congressional lawmakers has increased to repeal the tax on high-cost employer health plans under the Affordable Care Act (ACA). This tax, commonly referred to as the “Cadillac Tax,” is scheduled to take effect in 2018 and will impose a 40% excise tax on employer-sponsored health plans with annual benefits for individuals in excess of $10,200 and with annual benefits for families in excess of $27,500. The excise tax will be imposed on any amount in excess of the thresholds. These annual benefit thresholds will be subject to annual increase in line with the Consumer Price Index.
Since the adoption of the ACA in 2010, the Cadillac Tax has faced widespread scrutiny and many lawmakers, policymakers and employers have called for a significant modification to or outright repeal of the tax. Currently, a potential repeal of the Cadillac Tax enjoys significant bipartisan support among the members of the U.S. House of Representatives. However, it remains to be seen whether this latest push by U.S. lawmakers will result in any change to or repeal of the Cadillac Tax.