Is the 'Cadillac Tax' a Good Idea? - California Healthline

The Affordable Care Act calls for a new tax to be levied in 2018 on expensive employer-provided health insurance.

Known as the “Cadillac tax,” the new rules will require health plans for employees that cost more than $10,200 annually for an individual — or $27,500 for a family — to pay a 40 percent tax on any amount over the limit.

Proponents say the tax will help keep health care costs from rising as quickly as they would without it and point out the new tax will produce significant revenue. The Congressional Budget Office estimates the tax will generate $87 billion for the federal government in its first eight years.

Opponents say costs will be passed along to employers and consumers and will end up hurting the system

Efforts are under way in Congress to repeal the tax before it starts. The issue is also popping up in early presidential campaigning.

We asked consumer advocates, employers, insurers and other stakeholders if the Cadillac tax is a good idea.

We received responses from:

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

<h1>Is the ‘Cadillac Tax’ a Good Idea?</h1>
<div>		<time class="posted-on" datetime="2015-11-12T03:00:00-08:00">
			November 12, 2015		</time>
		</div>
<p>The Affordable Care Act calls for a new tax to be levied in 2018 on expensive employer-provided health insurance.</p><p>Known as the “Cadillac tax,” the new rules will require health plans for employees that cost more than $10,200 annually for an individual — or $27,500 for a family — to pay a 40 percent tax on any amount over the limit.</p><p>Proponents say the tax will help keep health care costs from rising as quickly as they would without it and point out the new tax will produce significant revenue. The Congressional Budget Office estimates the tax will generate $87 billion for the federal government in its first eight years.</p><p>Opponents say costs will be passed along to employers and consumers and will end up hurting the system</p><p>Efforts are under way in Congress to repeal the tax before it starts. The issue is also popping up in early presidential campaigning.</p><p>We asked consumer advocates, employers, insurers and other stakeholders if the Cadillac tax is a good idea.</p><p>We received responses from:</p><ul><li><a href="https://californiahealthline.org/news/is-cadillac-tax-a-good-idea/?share=facebook">				Click to share on Facebook (Opens in new window)				Facebook			</a></li><li><a href="https://californiahealthline.org/news/is-cadillac-tax-a-good-idea/?share=linkedin">				Click to share on LinkedIn (Opens in new window)				LinkedIn			</a></li><li><a href="https://californiahealthline.org/news/is-cadillac-tax-a-good-idea/?share=x">				Click to share on X (Opens in new window)				X			</a></li><li><a href="mailto:?subject=%5BShared%20Post%5D%20Is%20the%20%27Cadillac%20Tax%27%20a%20Good%20Idea%3F&body=https%3A%2F%2Fcaliforniahealthline.org%2Fnews%2Fis-cadillac-tax-a-good-idea%2F&share=email">				Click to email a link to a friend (Opens in new window)				Email			</a></li><li><a href="https://californiahealthline.org/news/is-cadillac-tax-a-good-idea/#print?share=print">				Click to print (Opens in new window)				Print			</a></li><li>				<a href="https://californiahealthline.org/news/is-cadillac-tax-a-good-idea/view/republish/">					Republish This Story				</a>			</li></ul><em><a href="https://kffhealthnews.org/about-us">KFF Health News</a> is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about <a href="https://www.kff.org/about-us">KFF</a>.</em><p><a href="https://californiahealthline.org/morning-briefing/">Subscribe</a> to KFF Health News' free Morning Briefing.</p>

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