You may have heard a little bit about the proposed “Cadillac Tax,” but do you know how it may affect you or your business?

In a nutshell, the Cadillac Tax is a 40{d044ab8acbff62f209a116f8142e303cb886f535b0fcf58cb82cde7cb327d3c9} excise tax that would be imposed on high cost health plans that exceed a certain coverage threshold, currently $10,200 for individual coverage and $27,500 for family coverage.  It’s slated to take effect in 2018, and will affect an anticipated 40{d044ab8acbff62f209a116f8142e303cb886f535b0fcf58cb82cde7cb327d3c9} of of employers according to a recent Aon Hewitt survey.

What Can You Do About It?

Even though the changes are several years away, many employers are already taking steps to minimize their impact.  The best way to start is by meeting with your adviser to analyze your current tax exposure.  You can then consider a number of benefit changes and other options to help keep your plan from being taxed.

Changes others are considering include:

  • Reducing the richness of their plans through higher out-of-pocket options
  • Increasing the use of wellness incentives
  • Reducing spousal eligibility or subsidies
  • Using narrower provider networks

There’s still hope that the excise tax will be repealed, or that the thresholds will be increased, but you can’t afford to avoid planning for its impact.  For more information check out this article on Employee Benefit Adviser, or contact Sequoyah Group today.