An excise tax on so-called “Cadillac” plans in the Affordable Care Act would affect more than half of workers in Massachusetts when it takes effect in 2018, according to a study by the Pioneer Institute.

Under the health reform law, insurance plans or businesses that offer health plans with annual premiums of more than $10,200 for individuals or $27,500 for families will pay a 40% excise tax on the portion of the premiums that exceeds those thresholds.

Health insurance costs in Massachusetts are the highest in the country. As a result, the health plans for many middle-income individuals  such as state, municipality or unionized employees will be affected by the tax.

The study estimated that:

  • A corporate employee with a family plan would owe $86,905 in additional taxes between 2018 and 2028;
  • A police officer on a family plan would owe $53,907 in additional taxes; and
  • A teacher on an individual plan would owe $20,807 in additional taxes.

The study also estimated that “most of the working population in Massachusetts will pay this tax” if health insurance costs “are not significantly contained.”