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It’s time to pay attention to the Cadillac tax. This 40 percent excise tax on employer-sponsored benefits deemed “too generous” was included as part of the Affordable Care Act in 2010 and is scheduled to be implemented Jan. 1, 2018. Now, as the IRS prepares to finalize the regulation, the Cadillac tax is a controversy being heavily debated.
In brief, the Cadillac tax may impact employer earnings and increase employee cost-sharing for health insurance coverage. This, of course, has many employers and employees concerned. On the flip side, doing away with it means potentially losing $80 billion the Congressional Budget Office estimates the tax will raise between 2013 and 2023—funds that have been allocated to help pay for Obamacare.1
Because it looks as though some form of the tax is unavoidable, now is the time to become familiar with the issue and begin to help clients who may be impacted.
“January 1, 2018, seems like a ways off, but employer groups to develop a benefits strategy with the Cadillac tax in mind by the end of 2016,” says Dave Keller, Chief Marketing Officer of IHC Specialty Benefits. “Now is the time to reach out to your group clients, examine their risk, and form a plan that allows them to continue offering benefits that maintain employee satisfaction and their bottom line.”
Here are five ways you can form a strategy and prepare your clients:
For more information on the products mentioned above, please contact your IHC representative.
1HealthAffairs. “Excise Tax on ‘Cadillac ‘ Plans.” Sept. 12, 2013. http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=99
2Internal Revenue Service. Notice 2015-16. March 9, 2015. http://www.irs.gov/irb/2015-10_IRB/ar04.html
This document is for general informational purposes only. While we have attempted to provide current and accurate information, this information is provided "as is" and we makes no representations or warranties regarding its accuracy or completeness. The information provided should not be construed as legal or tax advice or as a recommendation of any kind. External users should seek professional advice from their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.
About The IHC Group
The IHC Group is an organization of insurance carriers and marketing and administrative affiliates that has been providing life, health, disability, medical stop-loss and specialty insurance solutions to groups and individuals for over 30 years. Members of The IHC Group include Independence Holding Company (NYSE:IHC), American Independence Corp. (NASDAQ: AMIC), Standard Security Life Insurance Company of New York, Madison National Life Insurance Company, Inc. and Independence American Insurance Company. Each insurance carrier in The IHC Group has a financial strength rating of A- (Excellent) from A.M. Best Company, Inc., a widely recognized rating agency that rates insurance companies on their relative financial strength and ability to meet policyholder obligations. (An A++ rating from A.M. Best is its highest rating.) Collectively, the companies in The IHC Group provide insurance coverage to more than one million individuals and groups. For more information about The IHC Group, visit www.ihcgroup.com.
About IHC Specialty Benefits, Inc.
IHC Specialty Benefits, doing business as Health eDeals Insurance Solutions is a full-service marketing and distribution company that focuses on small employer, individual and consumer products. Health eDeals markets products through general agents online, telebrokerage, advisor centers, private label and directly to consumers. For more information about Health eDeals visit http://www.HealtheDeals.com.