House Bill Would Repeal the Cadillac Tax

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House Bill Would Repeal the Cadillac Tax
Calendar19 May 2015

Recently a group of House Democrats introduced a bill to repeal the ACA “Cadillac tax.” Beginning in 2018, a 40% excise tax will apply to employer-sponsored health coverage that exceeds $10,200 for self-only coverage and $27,500 for other than self-only coverage. In a statement, one of the bill sponsors, Rep. Joe Courtney (D-Conn.), said the tax would adversely impact those living in high-cost areas. We agree. In fact, using our survey data, we’ve calculated the cost variation that occurs by geographic region. Among large employers, the average annual total health plan cost per employee in 2014 was $11,641. Costs by region are 6.6% and 2.1% less in the South and Midwest respectively and 6.1% greater in both the Northeast and West. While we think a full-repeal of the tax is still a long shot, we’re hopeful that the discussions that are occurring on the Hill and in the press will result in changes to the tax that will benefit employers.

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