What else would you expect big government to call a 40% tax that is expected to hit 25% of employees in 2018 and 42% by 2028? The last major piece of Obamacare will impact consumers, corporations and union members.
The Impact? Middle-class workers could see a reduction in benefits. Companies in areas with high medical costs are more likely to be subjected to the Cadillac tax than those in lower-cost areas. Same for employers with unionized workers. Under scrutiny to be cut from the benefit package are the FSA, HSA and HRA accounts which provide tax-free dollars for out-of-pocket health costs. The law counts those contributions toward the thresholds for triggering the tax.
The Cadillac tax is 40 percent of the value of employer-sponsored plans that exceeds $10,200 for individual coverage and $27,500 for family coverage. The tax is levied on insurers and plan administrators, who are expected to pass it back to employers. The 40 percent rate is well above the income tax rates for most workers. If they don’t know it already, employees will learn, Obamacare came with Obamaco$t.
Employee Benefit Advisors provides employee benefits. We are a broker helping companies with their Health & Welfare Benefits. We also help companies revaluate PEO Services, deciding if a PEO is a good choice and if so selecting and implementing the PEO.
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