July 21, 2017
If the Senate fails to pass a health care reform bill that delays implementation of the Affordable Care Act's Cadillac tax, 28 percent of employers may have to begin paying the tax on their largest health care plans in 2020. Unless the delay is added to some other measure (such as a tax reform bill), Congress' failure to pass a bill would also mean employers with fully-insured plans would have to continue to pay the ACA's health insurance tax as well. While the latest draft Senate health care bill would delay implementation of the 40 percent Cadillac tax until 2026, it remains unclear whether the GOP has the votes to begin debate on the bill next week. According to two recent surveys, over 25 percent of employers with 5,000 or more employees say their largest health care plan will be subject to the Cadillac tax in 2020. By 2022, over half of large employers' health care plans with the largest enrollment will be hit by the tax if no changes are made to the plan design. In terms of cost, CBO currently estimates the Cadillac tax will cost employees $51 billion from 2020 to 2026, or an average $8.5 billion per year, and employers $15 billion, or an average $2.5 billion per year.