President Obama recently signed the Consolidated Appropriations Act of 2016, which among other things provides a two-year delay of the Affordable Care Act's excise tax on high-cost employer-sponsored health coverage (commonly referred to as the "cadillac tax" and governed by Internal Revenue Code section 4980I) and imposes a moratorium on the medical device excise tax.
Cadillac Tax Delay
Prior to the delay, the 40% tax was set to take effect in 2018 and would generally be imposed on plans that cost more than $10,200 (for self-only coverage) and $27,500 (for family coverage). As a result of the new law, this tax will not be effective until 2020.
Medical Device Excise Tax Moratorium
The 2.3% medical device excise tax that manufacturers and importers pay on sales of certain medical devices has generally been effective since January 1, 2013. As a result of the new law, this tax will not apply to sales during calendar years 2016 and 2017.
For more details, please review the new law in its entirety. As always, if you have any questions or would like to discuss this please contact your account manager at Provider Group or reach out to us via our website, or by calling 781-444-0347.