Congress has voted to fully repeal the Cadillac Tax and Health Insurance Tax
Posted on December 19, 2019
The legislation fully repeals the Cadillac Tax and repeals the Health Insurance Tax effective January 1, 2021. This means the Health Insurance Tax will still be in place for 2020 and will be gone in 2021.
Below are summaries of these two taxes that are now fully repealed.
Cadillac Tax: This tax was to take effect in 2022 under delays signed into law in December 2015 and January 2018, calling for a 40% excise tax on the amount of the aggregate monthly premium of each primary insured individual that exceeds the year’s applicable dollar limit, which will be adjusted annually to the Consumer Price Index plus 1%.
Health Insurance Tax: This tax included in the Affordable Care Act (ACA) increased the cost of health care coverage for consumers and employers in every state. The ACA imposed a new sales tax on health insurance that started at $8 billion in 2014, increased to $14.3 billion by 2018, and continued to increase each year.