Excise Tax on Cadillac Health Insurance Plans
Per the Affordable Care Act, the last large portion of the act, won’t go into effect until 2018. This large portion of the act will issue a 40% excise tax on the health benefits small businesses provide their workers above a certain threshold. In 2018, the tax will impact insurance and related benefits with a value of more than $10,200 for singles and $27,500 for families. For example, with an individual whose benefits equal $10,500, the tax would apply to the $300 above the threshold. The government has been offering tax deductions to employers offering health insurance and other benefits for over 50 years; taxing health care benefits would represent a huge shift in tax policy.
A handful of federal politicians have argued that the tax will make health insurance even more difficult to obtain for middle-class working Americans than it ever was before the Affordable Care Act was implemented.