5 Tools to Make Your Wellness Plan Bloom
June 6, 2016The One Critical Definition You Need to Know in Your Disability Benefit Plan
June 20, 20165 Tools to Make Your Wellness Plan Bloom
June 6, 2016The One Critical Definition You Need to Know in Your Disability Benefit Plan
June 20, 2016One of the last big components of the Affordable Care Act (ACA) is the introduction of the Cadillac tax slated to begin in 2020. The Cadillac tax is a 40% excise tax that will be imposed on high cost employer-sponsored health coverage that exceeds predetermined threshold amounts (including contributions to Flexible Spending Accounts, Health Reimbursement Arrangements and Health Savings Accounts). The Congressional Budget Office has projected that this tax will generate about $90 billion in revenue.
School, city and county employers have already been working on implementing changes designed to help them lower costs. Employers breathed a sigh of relief when the tax was pushed back from 2018 to 2020, giving them more time to make adjustments. But now with the November election looming and the change of command inevitable, the future of the Affordable Care Act and the Cadillac tax remains in the balance. Here’s where our presidential candidates stand on this issue:
Team Trump
Republican Donald Trump promises to “repeal and replace” the Affordable Care Act, including the Cadillac tax. His ACA alternative plan has yet to be unveiled but his emphasis will be to sell insurance across state lines. There is some speculation that House Speaker Paul Ryan will announce the ‘replace’ at the Republican National Convention this July. We’ll have to wait and see.
Team Clinton
Democrat Hillary Clinton supports the ACA but questions the value of the Cadillac tax. “Too many Americans are struggling to meet the cost of rising deductibles and drug prices,” Clinton said in a statement. “That’s why, among other steps, I encourage Congress to repeal the so-called Cadillac tax, which applies to some employer-based health plans, and to fully pay for the cost of repeal.” Clinton worries that the tax “may create an incentive to substantially lower the value of the benefits package” and shift costs to consumers. She supports a full repeal of the tax saying that her “proposed reforms to our health care system (expanding ACA) would more than cover the cost of repealing the Cadillac tax.”
Stay tuned for the 2016 election to see which candidate wins and what steps the next President makes in regards to ACA and the Cadillac tax. For more information about the Cadillac tax, read our legislative brief or our whitepaper, 5 Ways to Bend the Health Insurance Cost Trend.