30 Second Insurance Tips©

Tip 166- Long Term Planning: The Cadillac Tex

Yet another provision of The Affordable Care Act states that beginning in 2018, a 40 percent excise tax will be imposed on the value of health insurance benefits exceeding a certain threshold.
The thresholds are $10,200 for individual coverage and $27,500 for family coverage (indexed to inflation). The thresholds increase for individuals in high-risk professions and for employers that have a disproportionately older population.

The tax applies to both fully insured and self-funded plans. In the case of fully insured coverage that exceeds the applicable threshold, the “issuer” is responsible for paying the 40 percent excise tax. (That means, the insurer.)

In the case of self-funded coverage, the plan administrator (normally the employer) is responsible for paying the excise tax.

Pending final guidance, this isn’t much to go on. But it’s a start!