IRS: Tax returns should include penalty fee for not complying with ACA
March 4, 2014Americans still frustrated over state health insurance exchanges’ usability
March 6, 2014IRS: Tax returns should include penalty fee for not complying with ACA
March 4, 2014Americans still frustrated over state health insurance exchanges’ usability
March 6, 2014Guidance on the Affordable Care Act continues to be issued at a dizzying pace. Deadlines come, and then are extended. Parts of the law are implemented as scheduled and others are pushed off, sometimes indefinitely. As a result, employers are left scratching their heads wondering what will appear next on the horizon. This confusion can often lead to policy stagnation with respect to employee benefits. Yet, there is a looming provision which could greatly affect the cost of providing high quality insurance to employees.
In 2018, a provision called the Cadillac Tax is set to take effect. The Cadillac Tax is a new tax against high cost health plans. It should be noted that the Cadillac Tax includes more than just the cost for major medical policies. In aggregate, annual health care costs exceeding $10,200 ($850 per month) for single coverage and $27,500 ($2,291.67 per month) for coverage other than single coverage will be subject to a 40% excise tax. It is possible that the thresholds could rise by 2018, but it is unlikely they will be increased by a significant amount.
While it may be easy to rationalize a wait and see approach to this new tax threshold, inaction could limit your ability to adjust your benefits offerings enough to avoid this additional cost. Therefore, we highly advise reviewing your benefits offering now so you can take small steps to accomplish a larger goal. Otherwise, it may be too late and your costs could quickly escalate.
For more information, download our Legislative Brief.
For questions about this article, contact David Branback, Toll Free: 1-800-627-3660 | Direct Dial: 1-262-780-1237 | Email
