BREAKING: HIT and Cadillac Tax Repealed
Congress has voted to fully repeal the Cadillac Tax and Health Insurance Tax effective January 1, 2021. This means the Health Insurance Tax will still be in place for 2020 and will be gone in 2021.
Both unpopular taxes with bipartisan approval delayed the Cadillac Tax but put the Health Insurance Tax(HIT) back in for 2020 earlier this summer. See Cadillac Tax Out Health Insurance Tax (HIT) Back In
. Below are summaries of these two taxes that are now fully repealed.
Whats is the Health Insurance Tax (HIT)?
Health Insurance Tax: This tax included in the Affordable Care Act (ACA) increased the cost of health care coverage for consumers and employers in every state. The ACA imposed a new sales tax on health insurance that started at $8 billion in 2014, increased to $14.3 billion by 2018, and continued to increase each year.
The HIT costing an estimated 2.5%-3% added surcharge or an estimated $500/family annually and $241 for Seniors. Website Stop The Hit
calculates $5,000 as the average tax for a 10 man small business for example.
Whats is the Cadillac Tax?
The Cadillac Tax
was to take effect in 2022 and had been twice delayed since its original inception scheduled for Jan 2014. This tax called for a 40% excise tax on the amount of the aggregate monthly premium of each primary insured individual that exceeds the year’s applicable dollar limit, which will be adjusted annually to the Consumer Price Index plus 1%.
The 40% excise tax applies to the cost of employer health plan coverage exceeding certain threshold amounts, which were originally set for 2018 at $10,200 for individuals or $27,500 for families.
Originally, the Cadillac Tax
was pushed back by the behest of Unions to 2018 from the original proposed 2014 date. Most Unions with generous health care packages would not be complaint within that time frame. For average Gold Plans in regions such as NY, the widely unpopular Cadilac Tax would have been felt.
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