Employer-Sponsored Health Coverage

What is the Cadillac tax?

The so-called Cadillac tax is an excise tax on high cost health plans offered by employers. Beginning in 2022, health plans that cost more than $10,200 for an individual or $27,500 for a family plan will be subject to the tax, which is 40% of the amount that exceeds those thresholds. For example, if a family plan costs $30,000, the employer that offers the plan would owe 40% of $2,500 ($30,000 minus $27,500), or $1,000 for each family it covers under that plan.

While we have made every effort to provide accurate information in these FAQs, people should contact the health insurance Marketplace or Medicaid agency in their state for guidance on their specific circumstances.