Although 2018 is still a couple years away, I wanted to remind you about the “Cadillac tax” which arrives in 2018. The “Cadillac” tax is a 40% excise tax on the value of employer-sponsored coverage in excess of $10,200 (individual) and $27,500 (families). It is paid by insurers; however, the cost will definitely trickle down to employers. The dollar threshold is indexed to the Consumer Price Index plus 1% in 2019 and to the Consumer Price Index from 2020 on. The $10,200 limit includes premium cost (employer & employee paid) as well as HSA contributions (employer & employee funded). There is still a possibility that this limit could be changed or rescinded, but it is best to be prepared in case it is not.
Please keep in mind that due to the cost of coverage in Maine for certain groups, this will apply to plans even if they aren’t incredibly rich. As an example, the individual limit for HSA contributions for 2015 is $3350 or just over $279/month. The $10,200 limit translates to $850/month. If you have an HSA-compatible plan where the maximum 2015 contribution is made, the highest individual premium that falls under this threshold is $571/month.
I will be sending out additional information as it becomes available.
As always, please let me know if you have any questions regarding the Affordable Care Act.
Account Manager, Employee Benefits
CU Insurance Solutions
Phone: 800-287-3379 x 312