Delta Airlines has reduced the generous health benefits offered to its pilots in order to avoid a new federal tax on costly health plans, known as the “Cadillac tax.” Starting in 2018, most employers must pay a 40 percent excise tax on the amount that premiums for a health plan exceed $10,200 for an individual and $27,500 for a family.
“Given enough years, all plans will eventually risk being subject to the Cadillac tax and as they do, the natural reaction will be to continually reduce benefits provided,” wrote a Delta executive in a memo.