Under the Affordable Care Act, employer-sponsored health benefits whose value is considered too rich will be subject to an excise tax. It is called the High-Cost Excise Tax.
♦ In January 2018, the tax was suspended until 2022.
♦ July 17, 2019 - The House voted 419 to 6 to repeal the Cadillac tax.
The tax is commonly referred to as the “Cadillac tax”. It will equal 40 percent of the value of health benefits exceeding thresholds projected to be $10,800 for single coverage and $29,050 for family coverage.
♦ Employer-provided health benefits are excluded from taxable income, reducing income and payroll tax revenue by an estimated $260 billion in 2017.
Many prominent economists favor the Cadillac tax to help prevent overuse of tax-favored items. Labor union are opposed to this tax because it would affect generous healthcare plans.