Spending Bill Tax and Fee Delays Include “Cadillac Tax” and Health Insurance Industry Fee

Spending Bill Tax and Fee Delays Include “Cadillac Tax” and Health Insurance Industry Fee

Attached to the 1/22/18 short term spending bill passed by Congress are delays of three taxes under the Affordable Care Act (ACA), and a six-year extension of the Children’s Health Insurance Program (CHIP).

Tax and Fee Delays

  • Cadillac Tax” (40% Excise Tax) is delayed two more yearsCadillac Tax
    • New effective date of 1/1/22
  • Health Insurance Industry Fee (aka Health Insurer Tax)
    • Has been suspended for one year (2019)
    • Applies only to insured business
    • Is based on each insurer’s share of the taxable health insurance premium base
    • Helps fund federal and state Marketplaces/Exchanges
    • Paid by Insurers
    • Tax deductible for employers as part of premium
  • Medical Device Tax is suspended for two years (2018-2019)
    • This delays the excise tax (2.3%) on the sale of certain medical devices by the manufacturer or importer of the device
    • This moratorium was set to expire on 12/31/17 but has been suspended for two more years

 

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FosterThomas is a leading professional services company that provides solutions in the areas of Human Resources Consulting and Outsourcing, HR Staffing, Outsourced Recruiting, Employee Benefits Brokerage, Payroll Implementation and Services, HR for Government Contractors, Business Insurance, HR Compliance and Risk Management. We help organizations by providing solutions designed with a focus on cost containment strategies and increasing HR efficiency. FosterThomas HR Consulting was established in 1993 with offices in Annapolis, Maryland (Corporate), McLean, Virginia and Raleigh, North Carolina. Today, FosterThomas occupies a unique position as a full service provider of HR services.

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