To continue the review offered by Michael D. Thomas, LifeHealthPro.

Although the Affordable Care Act was passed in 2010, there has been a timeline of implementation — with some components being immediately implemented, while others have been implemented over time in 2012, 2013, 2014 and 2015.

Note: Numbers 5 and 7 did not directly affect Employers.

No. 4: Delay in Cadillac tax until 2020

The “Cadillac tax” is a 40 percent excise tax on the cost of health coverage that exceeds pre-determined threshold amounts and is imposed on coverage providers high-premium health insurance plans.

This cost of health coverage includes total cost by both employer and employee and is for plans costing more than $10,200 for individual and plans costing more than $27,500 for family coverage. This tax is calculated on a monthly and per-person basis, where any plan above $850 per month for single coverage and $2,292 per month for family coverage is subject to it.

Stephen Tackney, Deputy Associate Chief Counsel (Employee Benefits) with the IRS Office of Associate Chief Counsel (Tax-Exempt and Government Entities) addressed the 28th Annual Insurance Tax Seminar of the  Federal Bar Association Washington D.C. on Thursday, June 2, 2016 and shared news the that IRS is contemplating issuing another request for comments on issues regarding the Cadillac Tax. Tackney stated that there were still issues with the excise tax and that the IRS may not have enough feedback to promulgate proposed regulations.

Concerns arose that potentially 75 percent of employee health plans could be subject to the tax by 2029.

The 2016 Consolidated Appropriations Act imposed yet another delay in implementation of the Cadillac tax, which was originally scheduled to take effect in 2013. This implementation was delayed until 2018 but now is delayed until January 1, 2020.

In addition to the delay, the Cadillac tax payments will be tax-deductible, assuming the provisions ever take effect. At this point, the tax is “down, but not out,” and some sentiment still exists to keep it, since it was part of the original funding plan for the Affordable Care Act.

No. 6: Repeal of automatic health care enrollment

With the passage and implementation of the Bipartisan Budget Act of 2015, enacted on November 2, 2015, the ACA automatic health care enrollment requirement as written in Section 18A of the Fair Labor Standards Act (FLSA) was repealed.

Section 18A was added by the Affordable Care Act through section 1511.  Automatic enrollment required that employers with more than 200 full time employees to automatically enroll employees in health coverage unless employee opted out.

This provision had been postponed since December 2010 through a Department of Labor FAQ detailing that employers were not required to comply with automatic enrollment until the implementing regulations were issued.

This provision remained in doubt because of ensuing confusion over the interpretation of the statutory language and the likelihood of being an administrative burden for employers.

No. 8: Health insurance tax moratorium

This tax moratorium has been imposed by the Consolidated Appropriations Act — for 2017, on the collection of the annual health insurance provider fee which has been in effect since 2013.

This was a tax imposed on the health insurance providers but passed through to the consumer through premiums. It is anticipated that this could lower premiums by 1 to 3 percent.


No. 9: Individual tax penalties

If an individual goes without qualifying minimum essential coverage for more than a single period of up to three months in a year, he or she may owe a penalty under the Shared Responsibility payment. These have been in place since 2014 and the penalty increases annually. In 2016, it is the higher of these amounts:

  • 2.5 percent of annual household income above the tax filing threshold to a cap of the national average bronze plan premium, OR;
  • $695/adult and $347.50/child under 18 to a maximum penalty of $2,085 per family. The Kaiser Family Foundation analysis of silver plans in major cities in 13 states showed the following average rate increases from 2015 to 2016: