Employee Benefit Advisory – Spending Bill Delays Several ACA Taxes, Including Cadillac Tax
On Jan. 22, 2018, President Trump signed into law a short-term continuing spending resolution to end the government shutdown and continue funding through Feb. 8, 2018. The continuing resolution delays the following three taxes and fees under the Affordable Care Act (ACA):
The Cadillac Tax: The continuing resolution delays implementation of the Cadillac tax on high-cost group health coverage for an additional two years, until 2022. Due to its unpopularity, there is some indication that this additional delay will lead to an eventual repeal of the Cadillac tax provision altogether.
The Medical Device Excise Tax: The moratorium on the medical device excise tax was also extended under the continuing resolution for an additional two years, through 2019. As a result, the medical devices tax will not apply to any sales made between Jan. 1, 2016, and Dec. 31, 2019.
The Health Insurance Providers Fee: The continuing resolution also provides an additional one-year moratorium on the health insurance providers fee, for the 2019 calendar year. However, this fee continues to apply for 2018.
Given the current, rapidly changing legislative environment, it is important for everyone to be aware of the evolving applicability of existing ACA taxes and fees so that you know how the ACA affects your bottom line.
The ACA Compliance Bulletin below provides an overview of the ACA tax delays.
Please give your Benefits Consultant at Owen-Dunn a call if you have any questions or concerns.