Two-year Cadillac Tax Delay Set for Final Votes

Two-year Cadillac Tax Delay Set for Final Votes

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Two-year Cadillac Tax Delay Set for Final Votes
Calendar16 December 2015

Long-awaited 2016 spending and tax bills teed up for final House and Senate votes within days would postpone the Affordable Care Act’s (ACA) “Cadillac” tax on high-cost health plans to 2020, make this levy deductible to employers, and mandate a study of suitable benchmarks to use for age and gender adjustments to the limits triggering the tax. Other changes would provide a one-year moratorium on ACA’s annual fee on health insurers' net premiums (for US risks) and a two-year halt to the tax on sales of medical devices.

The spending bill also seeks to maintain budget neutrality by prohibiting the Centers for Medicare and Medicaid Services from using certain program funding to cover ACA’s “risk corridor” payments to insurers in the individual and small-group markets. The provision is similar to last year's budget deal that led to a funding shortfall for the program in 2015, and payments are likely to come up short again next year.

The excise tax delay was included in one of two bills unveiled late December 15 and early December 16 after private negotiations between congressional leaders from both parties and the White House. While some political snags could lie ahead, the delay is expected to clear Congress and get signed into law by the president within the next several days.

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