The “Cadillac tax” is a 40% non-deductible tax on the cost of employer-sponsored health coverage exceeding certain limits – $10,200 (self-only coverage) and $27,500 (family coverage) in 2018.
The tax will eventually affect large employers, union plans andpublic employee plans.
On December 15, congressional leaders unveiled a year-end spending package that includes a 2-year delay of the tax, making it effective in 2020 rather than 2018. The measure would also make the tax deductible for employers, further reducing the cost burden on employers paying the tax.
Congressional leaders in both parties have expressed support for the two year delay.
Congress is expected to vote on this before the Christmas break.