On Friday, December 18, Congress passed a new budget plan that was subsequently signed into law by the President. This new budget affected three ACA-related items: the tax on high-cost healthcare (the so-called “Cadillac Tax”), the tax on medical devices and the tax on health insurance. The Cadillac Tax and the medical device tax have been delayed two years, while the health insurance tax – implemented as a way to overcome the risk corridor budget neutrality provision – w as delayed for one year. 

For employers, the most significant impact is the delay of the Cadillac Tax to 2020. This is widely seen as simply a delay of the inevitable, which many are predicting to be an outright repeal of the tax. That remains to be seen, but as it stands, the Cadillac Tax is now four years away from implementation. 

Information contained herein is not intended to constitute tax or legal advice and should not be used for purposes of evading or avoiding otherwise applicable regulatory responsibilities as issued by the federal or state government(s) and/or taxes owed under the Internal Revenue Code.  You are encouraged to seek advice from your legal or tax advisor based on your circumstances.