2017 Presidential Budget Proposes Cadillac Tax Revisions

Cadillac Tax

The President’s 2017 federal budget proposal released February 9 includes a second round of revisions to the unpopular “Cadillac” tax on expensive private health insurance. The $4.1 trillion spending plan would raise the tax threshold to the level of the Affordable Care Act’s gold premium, where any state’s individual health insurance marketplace exceeds the Cadillac tax threshold.

The President approved a two-year delay on the 40% tax when he signed the 2016 spending bill on December 18. The tax is currently set to take effect in 2020; and is projected to raise $87 billion a year for ACA expenses.

Business groups and labor unions continue to call for the tax’s total repeal. The 2017 fiscal plan is expected to face stiff partisan opposition in Congress.

 

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