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Starting in 2018, the ACA will impose a 40% excise tax on high-cost group health care plans. The so-called Cadillac tax remains a top concern for employers and their benefit advisers, with many in the benefits industry calling for more guidance on several unanswered questions. Here are the top 5 open issues related to the Cadillac Tax, according to Richard Stover and Leslye Laderman, both principals in the Knowledge Resource Center of Buck Consultants.
1. What is employer-sponsored coverage?
The Cadillac tax applies to the cost of applicable employer-sponsored coverage that exceeds certain thresholds. But applicable employer-sponsored coverage includes not only group health plans providing benefits to active employees, but also retiree medical plans and other arrangements providing health benefits to employees. Additional guidance is required to clarify how certain benefits are treated for purposes of the Cadillac tax, say Laderman and Stover.