ACA Cadillac Tax

The ACA Cadillac Tax (Excise Tax) – is a tax on excess health benefits. The government has decided that no employer should provide more than a certain amount of benefit to an employee.

It’s time to look at a new way of funding your health care benefits.

If your health benefit costs exceed the annual limit of $10,200 for single coverage you will pay a 40% tax. The limit for self and spouse (i.e. family) coverage is $27,500. (However they will be looking at this each month starting in 2018.)

They will use the “COBRA equivalent” to determine the cost of coverage for self-funded plans. Here is a calculator that the employee coalition in Madison, Wisconsin (The Alliance) has online that will help you determine your risks. I highly recommend that you plug in your current numbers and see where you stand.

Do you charge a COBRA premium for single coverage in excess of $10,000? If you do then you will be paying the tax!

Here is the link to the IRS pamphlet about the tax.

Kaiser Family Foundation estimates 25% of employers will pay the tax. For a detailed report from Kaiser go here;


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Self Funded Employers

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