The ACA Times


  Show menu
  • Home
  • Articles
  • Get to Know the ACA
  • ACA – Frequently Asked Questions
  • Resources
  • Meet the Editors
  • Trusaic
  • Contact Us
  • Legal
  
  • Home
  • Cadillac Tax
  • IRS Asks For Comments on New “Cadillac Tax” Rules

Articles

IRS Asks For Comments on New “Cadillac Tax” Rules

August 12, 2015 Robert Sheen Cadillac Tax, Regulations
IRS Asks For Comments on New “Cadillac Tax” Rules

IRS-LOGO The Internal Revenue Service has identified additional issues under Code Section 4980I, commonly known as the “Cadillac Plan” excise tax, and is proposing new regulations to deal with them.

The agency is seeking public comments until October 1 on the proposed changes in Affordable Care Act rules regarding the excise tax, which will apply to tax years beginning January 1, 2018.

In February, the Treasury Department and the IRS issued Notice 2015-16, which addressed the definition of coverage to which the “Cadillac Plan” tax would be applicable, determination of the cost of the coverage, and the application of the dollar limit to the cost of coverage for determining the portion subject to the tax.

The latest announcement, Notice 2015-52, addresses additional issues, including the identification of taxpayers who may be liable for the tax, the effect of employer aggregation, allocation of the tax among applicable taxpayers, and payment of the tax.

After reviewing public comments on both Notices, the IRS and Treasury intend to issue proposed regulations on the excise tax.

The ACA imposes a 40% excise tax on any “excess benefit” granted to an employee over the applicable dollar limit for the employee as specified under the law.

One issue addressed in the latest Notice is defining the “coverage provider,” who may be the health insurance issuer, the employer, the plan administrator or the plan sponsor.

The IRS noted that, if an insurance company must pay an excise tax on behalf of an employer, the insurer is likely to pass through that added cost to the employer. But because the excise tax is not deductible for tax purposes, the insurance company is likely to charge the employer not just the amount of the excise tax but for the additional income tax, the insurance company will incur.

In addition, the Notice acknowledges that dollar limits on employer plans may vary depending on the age and gender characteristics of the employee population, since on average, older employees have higher health care costs than younger workers, and younger women have higher health costs than younger men.

The agencies also want public comment on how the excise tax might affect health savings accounts, flexible spending accounts, and similar trust or custodial accounts.

To learn more about ACA compliance in 2020, click here.


We’re committed to helping companies reduce risk, avoid penalties, and achieve 100% ACA compliance. For questions about the ACA contact us here.

Short URL of this page: https://acatimes.com/znx
Robert Sheen

Robert Sheen

Esq., is editor-in-chief of The ACA Times. He also is founder, president and CEO of Trusaic.

Robert Sheen is Founder and President of Trusaic. Robert is a graduate of the University of Southern California, in Business Administration with an emphasis in International Finance. He earned his Juris Doctor from Loyola Law School, Los Angeles, concentrating in Tax Law.

View more by Robert Sheen

Related tags to article

Affordable Care ActCadillac TaxIRSRegulation
Related Articles DFEH Adds New Guidance for SB 973 Reporting Due on March 31 DFEH Adds New Guidance for SB 973 Reporting Due on March 31
Related Articles Georgia Results May Have Impact on Federal Pay Equity Law Georgia Results May Have Impact on Federal Pay Equity Law
Related Articles Looking Back at Senator Harris’s Equal Pay Plan Looking Back at Senator Harris’s Equal Pay Plan
Related Articles Administration Predicts Lower ACA Enrollment by Robert Sheen  •  
Related Articles IRS Eases Rules on Hardship Exemptions by Robert Sheen  •  
Related Articles HHS Awards $36 Million To Health Centers by Robert Sheen  •  
Subscribe
Clean data owns future

Achieve Pay Equity

Popular Posts

  • Employers, Mark These Key 2021 Dates for 2020 ACA Reporting
  • New Individual Mandate Regulations: What You Need to Know
  • Minimize Penalties with ACA Best Practices for the Holiday Season
  • The ACA is Central to American Health and Wellbeing
  • Democrats Gain Senate, Paving the Way for Biden’s ACA Agenda
  • PPP Loans Are Now Available, Both First Draw and Second Draw PPP Loans

Trending Topics

  • Regulations
    (91)
  • Legislation
    (47)
  • Editorials
    (19)
  • ACA Compliance
    (126)
  • Tax Filings
    (19)
  • Applicable Large Employer (ALE)
    (13)
  • Penalties
    (18)
  • IRS
    (82)
  • Health Insurance Marketplace
    (28)
  • Polls/Surveys
    (18)
  • Health Care Reform
    (22)
  • Reporting
    (22)
  • IRS 226J/226-J
    (28)

Categories


Brought to you by Trusaic

 

 

 

Twitter Facebook

Downloads

The ACA 101 Toolkit

The Essential Guide to the ACA

Letter 226J Infographic

5 Common ACA Compliance Mistakes

Triangle of Trust

Articles

IRS Affordability Safe Harbors Help Avoid ACA Penalties

Calculating FT and FTE Employees

The ACA Monthly Measurement Method: A Few Examples

The IRS’s 1095 Forms for ACA Explained

Incorrect ITINs Will Cause Havoc With ACA Compliance

Knowledge Center

Get to know the ACA

Get to know Letter 226J

Webinar: The Recipe for Successful ACA Compliance

Trusaic News

Our Story

© 2021 Copyright Trusaic - All Rights reserved.

Close Window

Loading, Please Wait!

This may take a second or two. Loading, Please Wait!