New Law Amends ACA's Small-Group Size, Excise Tax Comments

New Law Amends ACA's Small-Group Size, Excise Tax Comments

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New Law Amends ACA's Small-Group Size, Excise Tax Comments
Calendar16 October 2015

President Obama has signed bipartisan legislation (S 1099) that effectively repeals the ACA provision that changed the definition of small group from 2-50 to 2-100 that was set to become effective on January 1. The new law lets states choose whether to expand their small group markets to 100 employees.

Ideas for simplifying calculation and payment of the Affordable Care Act's 40% excise tax on high-cost health plans and crafting a safe harbor for the cost thresholds are among the suggestions in a second round of "Cadillac tax" comments submitted to IRS last week. The comments from employer groups and other stakeholders (including Mercer) came in response to July's Notice 2015-52 and supplement earlier feedback on February's Notice 2015-16. Now that the latest comment period has ended, IRS is expected to finish drafting proposed regulations for publication at some point in 2016.

This week, Republican presidential candidate Jeb Bush outlined a plan to repeal the excise tax and the entire ACA, calling instead for tax­ing employees on the value of their employer-provided coverage above a dollar limit of $12,000 for in­di­vidu­als or $30,000 for fam­il­ies. The dollar threshold would be indexed annually for inflation. Other proposals in Bush’s plan would provide tax cred­its for people without em­ploy­er coverage, in­crease con­tri­bu­tion lim­its for health sav­ings ac­counts, encourage employer-sponsored wellness programs, and al­low small busi­nesses to make tax-free con­tri­bu­tions to their work­ers’ individual health insurance policies.

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