What is the goal of the Cadillac excise tax?

What is the goal of the Cadillac excise tax?

The Cadillac tax was designed to impose a 40% excise tax on the portion of employer-sponsored health insurance premiums above a specified dollar level. The revenue from the tax would have been used to cover other ACA provisions, like the premium subsidies in the exchanges.

Will the Cadillac tax be repealed?

The Cadillac tax and medical device tax are repealed beginning in 2020. These taxes were designed to help pay for the ACA’s coverage expansion. The Cadillac tax was initially scheduled to take effect in 2018 but was delayed first to 2020 and, most recently, to 2022.

What is the Cadillac tax when will it take place?

On January 22, 2018, Congress passed and the President signed a two-year delay of the 40 percent excise tax on high-cost employer-sponsored health plans, also known as the “Cadillac Tax.” This delay was part of a short-term federal spending bill and changes the effective date from 2020 to 2022.

How is Cadillac tax calculated?

The Cadillac tax is calculated for each taxable period with respect to an employee’s applicable employer-sponsored coverage, and equals 40 percent of the employee’s “excess benefit.” Generally, the taxable period is a calendar year, although the ACA allows the IRS to prescribe different taxable periods for employers of …

What was the Consolidated Appropriations Act of 2015?

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When does the Cadillac tax go into effect?

The Cadillac tax levies a 40 percent excise tax on “excess benefits,” meaning, the value of health insurance benefits surpassing certain dollar thresholds for both individuals and families. The tax was supposed to take effect in 2018 but has been delayed twice and is currently scheduled to be enacted in 2022.

What is the Continuing Appropriations Act of 2016?

CORRECTIONS. The Continuing Appropriations Act, 2016 (Public Law 114– 53) is amended— (1) by changing the long title so as to read: ‘‘Making con- tinuing appropriations for the fiscal year ending September 30, 2016, and for other purposes.’’;