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The Cadillac Tax and Its Potential to Transform How Americans Purchase Health Care Services

2016 NYU Review of Employee Benefits and Executive Compensation, Ch. 3

University of Illinois College of Law Legal Studies Research Paper No. 17-02

24 Pages Posted: 8 Nov 2016  

Richard L. Kaplan

University of Illinois College of Law

Date Written: November 7, 2016

Abstract

This Article examines one of the most contentious provisions of the Affordable Care Act – namely, the 40% excise tax on high-value health insurance provided by employers. This levy, commonly denominated the “Cadillac” tax, is scheduled to take effect in 2020 but has already induced many employers to raise annual deductibles on the health insurance they provide to reduce the value of such insurance and thereby lower their exposure to this new tax. After analyzing the administrative guidance proposed since the Cadillac tax’s enactment, this Article considers how that tax’s effective encouragement of high-deductible health insurance plans has inadvertently made the Health Savings Accounts that President George W. Bush promoted 15 years earlier much more appealing.

Suggested Citation

Kaplan, Richard L., The Cadillac Tax and Its Potential to Transform How Americans Purchase Health Care Services (November 7, 2016). 2016 NYU Review of Employee Benefits and Executive Compensation, Ch. 3; University of Illinois College of Law Legal Studies Research Paper No. 17-02. Available at SSRN: https://ssrn.com/abstract=2865794

Richard L. Kaplan (Contact Author)

University of Illinois College of Law ( email )

504 E. Pennsylvania Avenue
Champaign, IL 61820
United States
(217) 333-2499 (Phone)
(217) 244-1478 (Fax)

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