The Cadillac Plan: What is It and What Does it Mean to Me?


We obviously all know what a Cadillac is. But the ‘Cadillac Plan’? Let’s go ahead and get a virtual raise of hands as to how many are familiar with that term…..Anyone? Anyone?

Let’s start out by making it crystal clear that the ‘Cadillac Plan’ is NOT a government program designed to get us all behind the wheel of one of America’s top luxury vehicles. While that would be nice (fiscally irresponsible as it may be), the ‘Cadillac Plan’ is actually a term that originated in the early 90′s as the Clinton administration made its run at major healthcare reform. Fast forward to the 2010 Patient Protection and Affordable Care Act, otherwise known as Obamacare, and the ‘Cadillac Plan’ has once again found itself in the healthcare reform conversation.

Just as the Cadillac is considered a luxury vehicle, the ‘Cadillac Plan’ is considered a luxury form of healthcare coverage. Simply put, the ‘Cadillac Plan’ is a plan that costs more than $10,200 annually for single coverage care. Mind you, these are plans that don’t include vision and dental benefits. For family coverage, the ‘Cadillac Plan’ is defined as a plan that has an annual cost that exceeds $27,500 (again, not including vision and dental benefits).

Now why is it important to know what qualifies as a ‘Cadillac Plan’? Starting in 2018, the health care reform law will begin imposing a 40% excise tax on costs that exceed these thresholds. It should be noted however that the employer or insurer will be responsible for the tax, as well as that the amounts that qualify a plan as a ‘Cadillac’ will increase in future years based on factors that will be provided to the employer or insurer.

Luxury has it benefits, but it’s important to remember that those benefits do come with a cost.

This entry was posted in Health Insurance Tips, Info & Fun Facts, Healthcare News and tagged , , . Bookmark the permalink.

One Response to The Cadillac Plan: What is It and What Does it Mean to Me?

  1. Pingback: Obamacare Q&A: Will I Be Taxed On Health Insurance Benefits Paid for by my Employer? | RGI

Leave a Reply

Your email address will not be published. Required fields are marked *


You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Related Post

  • Obama Tackles Health Care Reform in Townhall Meeting at Facebook
  • Universal Healthcare: What Happens When We’re All Covered?
  • The Individual Mandate: Unconstitutional Outrage or Saving Grace?