The Patient Protection and Affordable Care Act’s (ACA) tax on high-cost health plans (also known as the “Cadillac” tax) would affect one in five (21 percent) of employers offering health benefits when it takes effect in 2022, unless employers change their health plans, according to a recent analysis from the Kaiser Family Foundation (KFF). An even larger share (31 percent) could be affected when workers’ voluntary contributions to Flexible Spending Accounts are taken into account. The ACA requires plan sponsors and insurers to pay a 40 percent excise tax on the excess cost of employersponsored health coverage for employees—amounts over $11,100 for employee-only and $29,750 for family coverage, adjusted for inflation annually. The Cadillac tax has been delayed several times, most recently to 2022.
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