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IRS Cadillac Tax Guidance ‘Still in Pipeline’

The IRS is still planning to release more guidance for the Affordable Care Act's excise tax on employer-sponsored health insurance—the “Cadillac tax.” “It's still in the pipeline,” Phil Lindenmuth, health care counsel at the Internal Revenue Service's Office of the Associate Chief Counsel, told Bloomberg BNA...
June 7, 2017

Cadillac Tax

The IRS is still planning to release more guidance for the Affordable Care Act's excise tax on employer-sponsored health insurance—the “Cadillac tax.” “It's still in the pipeline,” Phil Lindenmuth, health care counsel at the Internal Revenue Service's Office of the Associate Chief Counsel, told Bloomberg BNA. However, “it’s not a front-burner issue,” Lindenmuth said.

The Cadillac tax is a 40 percent levy on employer health care premiums that exceed certain thresholds ($10,800 for individuals, $29,500 for combined households). It targets employer-provided health plans, with proponents saying the tax is applied to so-called “overly generous” plans. This tax punishes people enrolled in private sector health plans simply because they have good coverage. That’s inherently unfair. PIA is adamantly opposed to the Cadillac tax and has actively campaigned for its elimination. Initially set to take effect in 2018, Congress voted to delay it to 2020.

The American Health Care Act, which passed the House in early May, would postpone the effective date of the excise tax to 2026. The Senate is developing its own health care bill and hasn’t revealed whether it will adopt the House version of the Cadillac tax provision or repeal it.

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