On December 18, President Barack Obama signed the Consolidated Appropriations Act (the Act), which includes a variety of tax extenders that we will address in a series of posts.

The Act delays the onset of the Affordable Care Act’s (ACA’s) “Cadillac Tax” by two years—now, it will not start until 2020. Along with this delay, the Cadillac Tax (if imposed) will be deductible, its thresholds will be indexed starting in 2018, and the controller general must study the underlying age and gender adjustments to the tax.

Apart from the delay and related mechanical changes, Congress also expressed a strong bipartisan desire (through a procedural vote during the legislative process) to eliminate the Cadillac Tax. It remains to be seen whether Congress and the next president will follow through with this possibility.

In the interim, employers should continue planning for the Cadillac Tax’s 2020 imposition.

It is unclear whether the delay will slow the growing momentum to adopt high-deductible health plans paired with health savings accounts or to pause changes that replace employer-provided retiree medical coverage with individual Medicare supplemental policies.

Finally, employers may need to revisit the accounting consequences of the delayed (and now deductible) Cadillac Tax, particularly in the context of retiree medical coverage.