about the Affordable Care Act’s

CADILLAC TAX

Beginning in 2018, the Cadillac tax will apply to employer-sponsored policies with premiums higher than $27,500 for a family or $10,200 for an individual. Anything beyond those thresholds will generally get hit with a nondeductible 40% levy.

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MISCONCEPTIONThere’s no urgency to make changes; after all, the tax doesn’t kick in until 2018.

REALITY CHECKIt takes time and research to strategically plan for the tax, so waiting until the end of 2017 to take action may be too late. Start now to identify inefficiencies and cost drivers in the health plans you have. Then benchmark the data to know if you are subject to the tax, how much it will be and how you can reduce it.

MISCONCEPTIONEmployees won’t understand the tax or the changes that will have to be made.

REALITY CHECKNot involving employees as you seek to make changes in response to the tax will only increase misunderstandings and unhappiness. Act now to create clear, concise messaging that will engage employees throughout the process.

Need help? Contact Carl Mowery, Managing Director, Compensation and Benefits Consulting, at +1 312 602 9147 or carl.mowery@us.gt.com.

MISCONCEPTIONS

MISCONCEPTIONThe tax affects only big employers with platinum-plated health care plans.

REALITY CHECKEstimates are that 26% of employers offering health plans will be hit by the tax in 2018 if they don’t make changes. That number will rise considerably over time.

Platinum

TAXED

Gold plan

TAXED

Silver plan

TAXED

Bronze plan

TAXED

2015 2018

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