What is the Cadillac tax?

When the Affordable Care Act was passed in 2010 it created specific employer mandates relating to employer-sponsored health plans. These mandates establish taxes for employers that fail to meet the legislation’s requirements. The Cadillac tax is an excise tax established by the ACA that districts may be at risk of incurring. Employers are taxed for premiums that exceed the limits provided by the law. The portion of any health insurance premium that exceeds $10,200 for individual coverage and $27,500 for family coverage will be taxed at 40 percent.  Health reimbursement arrangements (HRAs), flexible spending arrangements (FSAs), and most on-site medical clinics are all included in your calculation for the Cadillac tax. Beginning in 2018, the Cadillac tax will be assessed for your insurance contributions. For more information on this question, e-mail Ask HR.