Obamacare Cadillac Tax’s Secret Threat to FSAs
26th August 2015
If you like your flexible spending account … you might not be able to keep your flexible spending account.
Obamacare’s looming “Cadillac tax” on high-cost health plans threatens to hit 1 in 4 U.S. employers when it takes effect in 2018—and will impact 42 percent of all employers by a decade later, according to a new analysis.
And many of those employers will be subject to the heavy Obamacare tax because they offer popular health-care flexible spending accounts to workers, which, ironically, are designed to reduce the income tax burden to those employees.
As a result, the co-author of the analysis expects the health FSAs to start being phased out and “largely disappearing” over time by companies looking for reduce their exposure to the Cadillac tax.
Obamacare: The gift that keeps on giving.