Tax Law Insights

Beginning in 2018, certain employers will be liable for a new 40% federal excise tax on the value of excessive benefits provided through their health plans.  Health plans providing high cost benefits are referred to as "Cadillac" plans, and the new federal excise tax on high cost plans has come to be known as the "Cadillac tax".

1. Background.

The Cadillac tax (found in Section 4980I of the Internal Revenue Code - the "Code") was adopted as part of the 2010 Patient Protection and Affordable Care Act.  The Cadillac tax is intended to provide employers with an incentive to restrain the growth of ...