ASAE will hold a Sept. 16 town hall on the so-called "cadillac" tax on the Patient Protection and Affordable Care Act ahead of the Oct. 1 deadline for comments on IRS Notice 2015-52, which was released on July 30.
The latest IRS notice concerns which taxpayers may be liable for the excise tax and the payment of the applicable tax, among other items.
- Liabiliity is with the coverage provider, but who this is depends on the type of coverage - this could be the health insurance issuer, the employer or the person who administered the plan benefits.
- Each coverage provider is responsible for paying the tax only on the portion of excess benefit attributable to the benefit it provides, according to Keller Benefit Services. However, coverage providers generally do not have knowledge of the cost of coverage from other providers. Therefore, the employer is tasked with the responsibility to calculate the total cost of coverage and whether there is excess benefit, determine what portion of the excess is attributable to each provider, and notify the coverage providers.
Under the Affordable Care Act, both fully insured and self-funded employer health plans will be assessed a nonrefundable 40 percent excise tax - the "cadillac tax" -on the dollar amount of any employee premiums that exceed annual limits of $10,200 for individual coverage and $27,500 for family coverage. This includes several other costs paid by employers and employees such as contributions to flexible spending accounts or health savings accounts, but not dental and vision plans.
In May, ASAE submitted comments to the IRS on the administrative challenges employers are likely to face when the tax takes effect in 2018. This includes calculating the applicable cost of coverage because some additional costs are not administered through the same vendor as the group medical insurance. ASAE contents in some cases, it will be difficult to determine which vendor is responsible for paying the excise tax or which party will be held responsible if there are errors in making the calculations.
The ASAE town hall panel includes CEO John Graham, FASAE, CAE; Janet McNichol, SPHR, CAE, human resources director, American Speech-Language-Hearing Association; and ASAE chief administrative officer Bob Skelton, CAE. The Sept. 16 program will begin at 8:30 a.m. at conference center in ASAE headquarters.