Health Insurance Tax – Medical Device Tax – Cadillac Tax Continuing Resolution Passed January 22, 2018

1. Two-year delay of the Cadillac Tax on health insurance plans, from 2020 to 2022

  • The Cadillac Tax will impose an annual 40 percent excise tax on plans with annual premiums exceeding $10,800 for individuals or $29,500 for a family.
  • Some higher thresholds for employees in high-risk occupations, and the thresholds are indexed so even if it is effective in 2022 it’s likely the thresholds will be higher than those stated above.

2. One-year suspension of the health insurance tax (HIT)

  • The HIT tax was already suspended in 2017 and was just reinstated in 2018.
  • The one-year suspension in the CR means the tax is now suspended for 2019.
  • Insured rates for 2018 are already in effect and already include the HIT tax for 2018 (insurers usually added 3-5% for this tax). It’s unclear whether insurers will return the additional amount to employers or employees (or neither) now that the HIT tax is suspended for 2019.

3. Two-year suspension of the medical device tax

  • This has already been in effect, so should be suspended for 2018 and 2019.

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