On Monday January 22, 2018, Congress passed HR195 to extend funding for the government through February 8, 2018. President Trump signed the legislation into law Monday night. Although this new law was crafted to continue funding the government, it did contain 3 specific items impacting employer sponsored health insurance plans:
- Health Insurance Tax
- Presently, insured health plans include a premium tax that adds over 2% to the premium rate. This tax is part of the Affordable Care Act. With the passage of HR195, the Health Insurance Tax will be suspended for 2019.
- Cadillac Tax
- The Affordable Care Act contained what is often referred to as the “Cadillac Tax”. The tax was originally scheduled to be implemented in 2018. It would result in a 40% excise tax for health insurance plans with annual costs in excess of $10,200 for single coverage and $27,500 for family coverage. The tax would be paid by the plan sponsor. This tax was delayed to 2020 and now, as a result of HR195, it is delayed until 2022.
- Medical Device Tax
- Manufacturers of medical devices were set to be subjected to a 2.3% tax on their products. Again, this tax was part of the Affordable Care Act. The passage of HR195 delays the start of this tax for 2 more years.
The new tax law (signed on December 22, 2017) eliminated the individual health insurance mandate penalty starting in 2019. The employer mandate for Applicable Large Employers (generally companies with 50 or more full-time equivalent employees) and the 1095 reporting continues unchanged.
Employers should be aware of the evolving applicability of existing ACA taxes and fees so that they know how the ACA affects their bottom lines. R&R Insurance Services will continue to keep you informed of changes.
Read here for a more comprehensive list of these current updates. If you have any questions, feel free to contact a Knowledge Broker at 800.566.7007.
