Gear up for Cadillac plan tax — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Gear up for Cadillac plan tax

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Most employers are aware that the health insurance mandate under the Patient Protection and Affordable Care Act (PPACA), the law known informally as Obamacare, finally kicks in next year. But a potentially more costly provision for “Cadillac plans” is just down the road. This is the term used to describe high-cost health insurance plans with top-of-the-line benefits.

Effective for 2018 and thereafter, employers will be required to pay an excise tax on a plan costing more than $10,200 for an individual or $27,500 for a family.

The excise tax is equal to 40% of the cost of premiums above these thresholds.

The Cadillac plan thresholds under Obamacare will be indexed for inflation after 2018.

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