The budget agreement that Congress passed late last year included a holiday gift for employers: a two-year delay in the effective date of the Affordable Care Act's excise tax on high-value health benefits. The postponement, from 2018 to 2020, has increased expectations that the so-called Cadillac tax will eventually be repealed.
"The congressional activity provides significant momentum to our efforts to have the tax repealed," said Annette Guarisco Fildes, president and CEO of the ERISA Industry Committee, which represents large companies on benefits and compensation issues. "In our view, it's a recognition that the tax is ill-conceived."
Since the Affordable Care Act became law in 2010, the prospect of a 40 percent excise tax on company-provided health plans whose value exceeds certain thresholds—set at $10,200 for individual plans and $27,500 for family plans for 2018—has encouraged many employers to make changes to their healthcare benefits to try to ensure they won't exceed those thresholds.
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