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Study: Middle Class Will Bear Brunt of Cadillac Tax

03/17/16

  05:49:00 pm, by MedBen5   , 188 words,  
Categories: News, Health Care Reform, Taxes, IRS

Study: Middle Class Will Bear Brunt of Cadillac Tax

IRS

A new study suggests that middle-class families will be hardest hit by the Affordable Care Act's unpopular "Cadillac" tax.

Investors Business Daily reports that the study indicates the excise tax — ostensively meant to discourage benefit-rich health plans with the threat of a non-deductible 40% surcharge on insurance premiums above $10,800 for individuals and $29,100 for families — will primarily affect families with incomes between $38,000 and $100,000.

According to study co-author Steffie Woolhandler, because middle-class families benefit the most from the current tax exemption to employer-provided insurance, they'll ultimately bear the brunt of the Cadillac tax.

The Cadillac tax has also been criticized for potentially impacting more modest health plans as their costs continue to rise at a pace faster than overall inflation. For these and other reasons, late last year President Obama approved a two-year delay of the tax's implementation until 2020.

Regardless of the delay, however, MedBen advises that employers continue to make whatever adjustments to their benefits necessary to manage health care cost increases. Clients who would like help determining their probability of being subject to the Cadillac tax are welcome to contact MedBen Vice President of Compliance Caroline Fraker at cfraker@medben.com.

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