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Health Benefits Excise Tax:

how is excise tax calculated

How Could It Impact Your Company?

This excise tax calculator is for meant for illustrative purposes only and is based on a simplified formula pertaining to active employees. This calculator excludes additional adjustments that can be made to benefit employers with high costs due to the age and gender of their workforce or the high-risk nature of their industry.

2025 Calculated Totals:

Estimated Excise Tax for

Single and Family in 2025:

Because the excise tax does not go into effect until 2018, several variables could influence your estimated excise tax, such as:
  • Changes in your estimated annual percentage increases (step 2).
  • A national inflation rate that is higher or lower than projected here.
  • Modifications to your benefit plan.
  • Changes to excise tax

    requirements made by policymakers in future sessions. The calculator is not regularly updated to reflect ongoing IRS guidance.

Remember that your projected tax is calculated based on the marketplace that is expected to exist 12 years from now. Although the hope is that trends will flatten, average premiums for employer plans have more than doubled over the past 10 years. The estimated tax should be considered in terms of 2025 values.

3 The 2018 threshold could increase if actual growth of health costs between 2010 and 2018 exceeds projected growth during that period. After that, the thresholds will increase at or near the rate of inflation.

4 Insurance companies and/or benefits administrators would be liable for the tax, although employers will be responsible for determining ratio of liability.

Category: Taxes

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