On December 20, 2019, the Cadillac Tax was officially repealed on December 20, 2019, as part of the Further Consolidated Appropriations Act, 2020.
The Cadillac Tax was intended to be a major revenue-raising source of the Affordable Care Act (ACA). Employer-sponsored health benefits whose value exceeded legally specified thresholds would have been subject to a 40% excise tax. Beginning in 2022, these thresholds were projected at $11,200 for single coverage and $30,150 for family coverage and would continue to grow consistent with the consumer price index. The additional revenue derived from this tax was designed to pay for the additional costs established by the ACA, which included Medicaid expansion and Exchange subsidiaries.
After delays of the tax’s effective date by President Obama in 2015 and President Trump in 2018, coupled with concerns on both sides of Congress, some could say this repeal was a long time coming.
The information and content contained in this blog post are for general informational purposes only, and does not, and is not intended to, constitute legal advice.