Today, Congress released the legislative text for the year-end spending bill. Among various other things, the bill proposes a two-year delay on the high cost plan excise tax (Also known as the “Cadillac Plan Tax”). This means the tax would go into effect after December 31, 2019 (and not after December 31, 2017 as currently scheduled). This is welcomed news for employers who are currently looking at mechanisms to mitigate this potential tax burden.
The bill also proposes the following changes to the Affordable Care Act (ACA):
- Deductibility of the Cadillac Tax under the Tax Code
- Requirement to study age and gender adjustment benchmarks related to the Cadillac Tax
- Delay in the effective date of the Medical Device Tax
- Continued funding of the Health Insurance Tax
Before any changes can occur, the bill will need to pass a vote by the House and Senate before being signed by the President. While there appears to be some bipartisan support for these changes, given the proposed changes to the ACA, it is unclear whether the President will approve such legislation.
We will continue to monitor and update you with the latest information.