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Capitol Health Call
November 10, 2015

Senate Bills Target Employer Health Plan “Cadillac Tax”

JAMA. 2015;314(18):1906. doi:10.1001/jama.2015.13695

Two bills have been introduced in the US Senate to eliminate taxes on high-cost employer health care plans. The so-called “Cadillac tax,” described in Section 49001 of the Internal Revenue Code and scheduled to take effect January 1, 2018, would require employers to pay a 40% excise tax on benefit costs exceeding $10 200 for 1 employee or $27 450 for a family (http://1.usa.gov/1LUjbEJ). Certain types of plans are excluded from the tax, including military health care benefits, long-term care insurance, and stand-alone vision and dental insurance (http://1.usa.gov/1N8Eykd). According to a Kaiser Family Foundation analysis, 26% of employers would have at least 1 health plan exceeding the tax threshold in 2018 when the value of flexible spending accounts is added to the value of a health plan (http://kaiserf.am/1hZTEOw).

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