The Affordable Care Act “Cadillac Tax”: What You Need to Know

Cadillac Tax

2013 Health Coverage Trends SnapshotAs part of the affordable Care Act (ACA), high-cost health plans will be subject to an excise tax on benefits that exceed a pre-determined cost threshold beginning January 1, 2018. Though it is a full two years away, Health Net is here to help you start gathering information now to be prepared for the future!

The excise tax, known as the “Cadillac Tax” applies to insured and self-funded large and small group health plans. The amount of the tax is 40 percent of the amount considered in excess of the cost threshold. Final regulations, however, have not been issued, and we expect further IRS guidance before the tax is assessed.


What we’re doing

Communications from Health Net will be issued and updated as new information becomes available. We want to be sure that you are prepared to address questions that your clients may have about the tax, our implementation efforts, and potential strategies to minimize or mitigate the tax.

Health Net is assessing the impact of the legislation and is watching closely for any additional IRS guidance. In accordance with current IRS guidance, Health Net plans to submit the tax to the IRS on behalf of any fully insured group impacted by the tax.

We’ll establish new processes and procedures to coordinate tax calculations with these groups, and keep you informed of any changes.


We’re here for you

As your business partner, Health Net is here to help support your business! For more details on the Cadillac Tax, please refer to the attached flyer for your region. If you have any questions, please contact your local Health Net sales consultant.

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Molly Tuttle