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Part D Employer Group Waiver Plan - How to Calculate Cost of Plan


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How does the Cadillac tax apply to an EGWP plan? Under the ACA, there is a 40% tax on the excess cost of health insurance. A Part D Employer Group Waiver Plan ("EGWP") provides insurance that supplements Medicare. How do the Medicare reimbursements get treated for Cadillac tax purposes? Example: Assume monthly cost of EGWP plan is $1,000 and that Medicare pays for $750 and employer/insurer pays for $250. Is the total $1,000 considered the cost of health insurance or just the $250 paid by the employer/insurer?

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