Is Your Employee Benefits Plan Subject to the ‘Cadillac Tax’?

Taking ownership of 6055 & 6056 reporting requirements under ACA.

If you offer your employees a generous health care plan, you could be subject to the ‘Cadillac Tax’. Even if your plan only meets minimum essential coverage requirements, you still must file reports to the IRS detailing the coverage you provide, and to whom – so that they can determine if additional taxes are to be levied.

Initiated under the Accountable Care Act (ACA) and due to become effective in 2018, the ‘Cadillac Tax’ is an annual tax that will require you to pay 40% of the amount by which your employer-sponsored health plan EXCEEDS government-established thresholds ($10,200 for individual and $27,500 for family coverage for combined employer/employee premiums). It’s a complicated concept and calculation that many employers could use some expert help in navigating.

The problem we’re seeing is that a significant percentage of employers are procrastinating on this important issue – putting them at risk for reporting penalties and eventually, underlying excise taxes. In fact, in a recent poll by PWC of 480 employers in 36 industries, only 10% of respondents indicated that they have implemented a solution to comply with this reporting mandate.