Check out the IRS’s latest advice on Obamacare compliance
Companies are still waiting for answers on what will and won’t trigger Obamcare’s so-called Cadillac Tax.
Beginning in 2018, employers will pay a 40% excise tax on the value on any healthcare coverage that exceeds $10,200 for single coverage or $27,500 for families in premium costs.
In Notice 2015-16, the IRS covers three key areas that your benefits staffers need to know about:
1. Health Savings Account (HSA) contributions
The IRS was clear that employer HSA contributions are subject to the excise tax. What’s less clear is how employee pretax contributions will be treated.
For now, only “employee after-tax contributions to HSAs are excluded.”
Based on how the IRS plans to treat pretax HSA contributions, many employers will be subject to the Cadillac Tax unless they limit the amount that workers can contribute.
2. Vision, dental and Employee Assistance Programs (EAPs)
The guidance also said the feds were considering excluding self-insured vision and dental plans, which are considered excepted benefits from the Cadillac Tax by using their “regulatory authority.”
They will also look into doing the same for EAPs that fall under the excepted benefit category.
Under current health reform regs, fully insured dental and vision plans are excluded from the excise tax.
3. Specific on-site clinics
And finally, the IRS touches on the type of onsite medical clinics – those that offer de minimis care to workers – that will likely be excluded.
The IRS cites a COBRA reg to spell out that clinics should be excluded if:
• the care consists primarily of first aid provided during the employer’s work hours for treatment of a health condition, illness or injury that occurs during work hours
• the care is only available to current employees, and
• employees aren’t charged for the use of the facility.
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