Cadillac Tax delayed until 2022


On Monday, President Trump signed a stopgap funding bill delaying the implementation of the Cadillac Tax until 2022. A provision of the Affordable Care Act, the Cadillac Tax is a 40 percent excise tax  imposed on high-cost employer-sponsored group health plans. The tax will expect to impact at least 1-in-4 employers. Self-insured employers are expected to pay the tax directly, while insurance carriers will be responsible for the tax on fully insured plans.

In short, the Affordable Care Act imposes a 40 percent excise tax on any “excess benefit” provided to an employee over the applicable dollar limit for the employee for the month. To date, the annual threshold dollar-limit amounts have been set at $10,200 for individual coverage and $27,500 for family coverage.

Under the new law, the Cadillac Tax, in its entirety, will not take effect until at least 2022.

Let Plexus lend a hand

Have questions regarding today's Alert or other employee benefits matters? We can help. Contact a Plexus benefits client service team member in Deer Park, Ill. (847.307.6100), Chicago (312.606.4800), Dallas (972.770.5010), or Oklahoma City (405.840.3033).

IRS begins ACA penalty enforcement for 2015 violations

For some employers, the end of 2017 could bring some unwanted news from the IRS. Recently, the IRS signaled it will begin to send enforcement letters to firms that owe back penalties for not complying with the Affordable Care Act's "Employer Shared Responsibility Requirement" in calendar year 2015 (tax season 2016). According to the IRS, affected firms should expect to see the letters late this year.

Under the Affordable Care Act, employers with at least 50 full-time employees (or full-time equivalents) must offer health coverage to those associates. They must also offer minimum essential coverage to the employees, and the coverage must meet an affordability standard. Firms complete IRS Forms 1094-1095 to document compliance with ACA.

In a story published Thursday, the New York Times estimated that "thousands" of businesses could soon be receiving Letter 226J, which outlines what firms owe to satisfy their obligation under ACA.

Firms can dispute the proposed penalties, and the IRS website offers some  guidance on the appeals process.

Have questions regarding IRS ACA enforcement and compliance?

We can help. Contact a Plexus client service team representative in Deer Park, Ill. (847.307.6100), Chicago (312.606.4800), Dallas (972.770.5010), or Oklahoma City (405.840.3033). We’re here to help – and we’re happy to help.