Cadillac Tax
On December 20, 2019, President Trump signed into law a full repeal of the Cadillac Tax (along with other ACA taxes). Read our
Excise “Cadillac” Tax
This 40% tax on high-cost employer plans has been fully repealed and will never take effect.
Alliance to Fight the 40
Many employers, unions, insurers and health insurance industry groups would like to see this tax repealed or modified.
The Alliance is a group of stakeholders seeking to repeal the 40% Cadillac Tax.
Excise “Cadillac” Tax Details
On January 22, 2018, Congress passed and the President signed a two-year delay of the 40 percent excise tax on high-cost employer-sponsored health plans, also known as the “Cadillac Tax.” This delay was part of a short-term federal spending bill and changes the effective date from 2020 to 2022. The tax was delayed once before through the Consolidated Appropriations Act of 2016.
In February and July 2015, the Internal Revenue Service (IRS) issued notices covering a number of issues concerning the Cadillac Tax, and requested comments on the possible approaches that could ultimately be incorporated into proposed regulations. While the tax was originally non-tax deductible, the December 2015 changes suggest it will be tax deductible for employers who pay it.
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* As indicated by IRS notice issued on February 23, 2015 and subject to future regulatory clarification.
How it works: Examples based on current threshold amounts
Note: These threshold amounts will be indexed before the tax takes effect in 2022.
Self-only coverage
A $12,000 individual plan would pay an excise tax of $720 per covered employee:
$12,000 – $10,200 = $1,800 above the $10,200 threshold
$1,800 x 40% = $720
Family coverage
A $32,000 family plan would pay an excise tax of $1,800 per covered employee:
$32,000 – $27,500 = $4,500 above the $27,500 threshold
$4,500 x 40% = $1,800
These charts show how the tax increases as the plan’s cost increases
Self-only coverage
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Family coverage
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Individual and family medical and dental insurance plans are insured by Cigna Health and Life Insurance Company (CHLIC), Cigna HealthCare of Arizona, Inc., Cigna HealthCare of Illinois, Inc., Cigna HealthCare of Georgia, Inc., Cigna HealthCare of North Carolina, Inc., Cigna HealthCare of South Carolina, Inc., and Cigna HealthCare of Texas, Inc. Group health insurance and health benefit plans are insured or administered by CHLIC, Connecticut General Life Insurance Company (CGLIC), or their affiliates (see
All insurance policies and group benefit plans contain exclusions and limitations. For availability, costs and complete details of coverage, contact a licensed agent or Cigna sales representative. This website is not intended for residents of New Mexico.