Excise Tax

Beginning with the 2022 tax year, the ACA requires plan sponsors and insurers to pay a 40% excise tax (known as the “Cadillac” tax) on the excess cost of employer-sponsored health coverage provided to employees—amounts over $10,200 for employee-only and $27,500 for family coverage, adjusted for inflation annually (projected to be $11,100/$29,750 in 2022). Business Group members expect that the cost of coverage generally will reach these dollar thresholds between 2018 and 2025 and therefore are deeply concerned that implementation of the excise tax will (1) substantially increase the cost of providing group health plan coverage and (2) raise costs or reduce benefits for employees and their families. Therefore, the Business Group supports repeal of the excise tax and, more generally, maintaining the current tax treatment of employer-sponsored health coverage.

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Featured Resources

Health Benefits Tax Calculator Download Health Benefits Tax Calculator
As Congress considers proposals to change the favorable tax treatment of employer-sponsored benefits, this tool helps you estimate new tax liability for your company and employees under three scenarios: eliminating the tax exclusion for health benefits, capping the exclusion, or eliminating all employer-sponsored coverage.

ACA Boot Camp: Fees, Taxes, and Penalties ACA Boot Camp: Fees, Taxes, and Penalties
This webinar provides an overview of the ACA fee and tax provisions, including a discussion of the ACA excise tax on employer-sponsored health coverage.

Numbers You Need: Percentage of Employers that will be Subjected to the Excise Tax Numbers You Need: Percentage of Employers that will be Subjected to the Excise Tax
A greater percentage of employers will be subjected to the excise tax every year. By 2020, it is projected that the majority of large employers will have plans that exceed the excise tax.



Also of Interest

Joint Letter to House Leadership Urging Immediate Action to Repeal ACA's Cadillac Tax
The National Business Group on Health as part of the National Coalition on Benefits sent a letter to House Speaker Paul Ryan (R-WI) and Minority Leader Nancy Pelosi (D-CA) urging Congress to repeal the ACA's Cadillac Tax this year.


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