Congress has approved, and President Obama has signed, a sweeping spending package that would delay or suspend the Affordable Care Act’s “Cadillac tax,” medical device tax, and health insurance tax. The changes are generally seen as a significant blow to the ACA – one that could embolden those seeking to further undercut the health law.
The spending package includes three significant changes to the Affordable Care Act, including a two-year delay of the “Cadillac tax” on high-cost health plans, after support from a coalition of Democrats and Republicans, labor unions, employers, and insurance companies, who have pushed for the Cadillac tax to be delayed until 2020. In addition to the Cadillac tax delay, the spending package also suspends the ACA’s medical device tax for two years and creates a one-year moratorium (in 2017) on a tax levied on all private health insurance.
In total, it is estimated that these delays/changes will reduce the Affordable Care Act’s revenue by $40 billion, which is a sizable portion of the approximately $500 billion in revenue the Congressional Budget Office expects the ACA to raise in the next year. As a result, these changes could ultimately force tough decisions about what type of benefits or subsidies the law can provide to beneficiaries.
If you have questions about the Affordable Care Act or other employee benefit topics which may impact your business, please contact attorney Steve Theising at stheising@KDDK.com or (812) 423-3183, or contact any member of the KDDK Tax and Employee Benefit Practice Team.
About the Author
Steven M. Theising, an attorney at Kahn, Dees, Donovan & Kahn, LLP (KDDK), in Evansville, Indiana, practices primarily in the areas of business, construction, real estate, tax and employee benefits, and collection and creditors’ rights law. Steve utilizes his accounting and financial background to provide both legal and practical business analysis in negotiating, resolving and closing business, construction and real estate transactions and disputes. He also assists clients with addressing and resolving environmental and estate planning issues.