IRS Seeks New Input on 2018 Excise Tax

IRS Seeks New Input on 2018 Excise Tax

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IRS Seeks New Input on 2018 Excise Tax
Calendar04 August 2015

With the ACA's 40% excise tax on high-cost employer-sponsored health coverage slated to take effect in 2018, IRS last week asked for a second round of comments on how to implement the tax. Notice 2015-52 supplements February’s Notice 2015-16 and seeks input on new issues including identification of which entities may be liable for the tax, employer aggregation, age- and gender-based increases to the dollar limit, allocation of the tax among applicable taxpayers, and payment. IRS also wants feedback on cost of coverage issues not covered in the earlier notice. Comments are due October 1.  

In Congress last week, recent guidance requiring self-insured and large-group insured nongrandfathered health plans to "embed" individual in-network out-of-pocket (OOP) limits in family coverage by the 2016 plan year drew criticism at a House Education and the Workforce Committee hearing. Seeking a one-year delay in enforcement, committee Chairman John Kline, R-MN, said he's heard concerns from a number of employers about this "unilateral change" in how to apply the ACA's separate OOP limits for individual and family coverage.

US Department of Health and Human Services (HHS) Secretary Sylvia Burwell told Kline that HHS is "hearing comments” on the issue and wants to “incorporate those comments and understand if it is implementable.” To date, no changes have been made to the May 2015 ACA guidance from HHS, IRS, and the Labor Department that requires plans to embed individual OOP limits in family coverage by the 2016 plan year.

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