Here are five things to know:
1. The Employers Council on Flexible Compensation claims the Cadillac tax may eradicate tax-advantaged healthcare flexible spending accounts and house saving accounts.
2. The Cadillac tax is set to go into effect Jan. 1, 2018. The tax places a 40 percent levy on employer-sponsored health insurance plans that exceed $10,200 for single coverage or $27,500 for family coverage.
3. Over 100 million Americans have consumer-directed accounts, which are intended to help employees pay for increasing out-of-pocket healthcare expenses.
4. The Kaiser Family Foundation says the Cadillac tax puts FSAs at risk because the accounts are separate from the main health insurance options employers provide. Therefore, eliminating the FSAs gives employers a way to reduce costs without affecting the underlying plans.
5. To avoid setting off the excise tax, nearly 19 percent of large employers reduced or eliminated employee contributions to FSAs. Thirteen percent of large employers reduced or eliminated employee contributions to HSAs, as found in an American Health Policy Institute survey, according to Forbes.
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