Shopping Cart
Your Cart is Empty
Quantity:
Subtotal
Taxes
Shipping
Total
There was an error with PayPalClick here to try again
CelebrateThank you for your business!You should be receiving an order confirmation from Paypal shortly.Exit Shopping Cart

Becker & Associates

Blog

Blog

"The Cadilac Tax" scheduled for 2018! WAY after the 2016 elections

Posted on August 3, 2015 at 6:25 PM

The 40% Excise Tax a.k.a. “Cadillac Tax”

The Cadillac Tax is a 40% excise tax scheduled to take effect in 2018 to reduce health care usage and costs by encouraging employers to offer cost-effective plans that engage employees in sharing in the cost of care. The tax impacts plans exceeding the following thresholds, which will be adjusted annually for inflation:

$10,200 annually or $850 per month for individual coverage

$27,500 annually or $2291.66 per month for family coverage


In simple terms, this means anyone who's health plan costs more than what the Federal Government says is reasonable, will have to pay 40% excise tax on the cost above the line.  Example: if your employer pays for let's say the silver plan, and you "buy up" to the platinum for your family and the total exceeds the government line, your Employer will be taxed at 40% for any amount over the line which will undoubtebly be passed right on down to YOU (this tax is NOT deductible either!) while congress, many unions and large chains are exempted, the middle class takes another sucker punch.


On July 30, the Department of the Treasury and the Internal Revenue Service (IRS) issued a second notice regarding the 40% Excise Tax a.k.a. the Cadillac Tax. The notice provides information on possible approaches that are being considered for administering the Cadillac Tax and continues the process of gathering input that will be used to develop regulations.

This is a follow-up to the notice issued on February 23, 2015, and comments may be submitted until October 1, 2015.

The notice addresses several issues, including:  Who pays the tax, How the tax will be determined, How the tax will be paid, Who Pays the Tax.

Each “coverage provider” must pay the tax on its share of the excess benefit. A coverage provider is:

The health insurer for insured coverage.

The employer for accounts such as Health Savings Accounts (HSAs) to which the employer contributes.

The plan benefits administrator – the agencies are seeking comments on whether this should be the third-party administrator or the entity that has ultimate responsibility for plan administration, typically the employer.

How the Tax will be Determined

The notice seeks comments on how to calculate and administer the tax. The following are some of the proposed approaches.

Timing – Following the end of each calendar year, employers will need to determine whether and by how much the cost of coverage exceeded the allowed limit for each month. The employer must then notify the IRS and each coverage provider of their share of the excess benefit so the tax can be calculated and paid.

Cost – The cost of coverage may be determined in a manner similar to determining COBRA premiums.

Age and Gender Adjustments – The current thresholds for 2018 are $10,200 for individual coverage and $27,500 for family coverage. These amounts may be increased for some employers based on how the age and gender of their employee population compares to the national workforce. No downward adjustments will be made. The notice seeks input on how these adjustments should be determined.

Allocation of Accounts – The notice proposes that employer and employee contributions to accounts such as HSAs, Health Reimbursement Accounts (HRAs) and Flexible Spending Accounts (FSAs) would be allocated equally to each month of the plan year, regardless of when the contributions were actually made. For FSAs, the agencies propose that the annual contribution amount be used, regardless of whether all funds were spent during the year or some funds were carried over to the next year.

Employer Aggregation – Related employers would be aggregated and treated as a single employer.

Taxation – No deduction is allowed for the payment of the tax.

How the Tax will be Paid

Each coverage provider will be responsible for paying the tax on its share of the excess benefit. IRS Form 720, the Quarterly Federal Excise Tax Return, may possibly be used to pay the tax. If so, a specific quarter of the calendar year would be designated for payment.

Proposed Regulations Still to Come

The agencies will review all comments and leverage the feedback to help draft regulations.


Categories: 2016- Small Employer Groups of 2 to 100 Employees

Post a Comment

Oops!

Oops, you forgot something.

Oops!

The words you entered did not match the given text. Please try again.

38718 Comments

Reply Denbinly
2:55 PM on June 16, 2021 
deltasone online legal canadian pharmacy online purchase sildenafil citrate 100mg 50 mg viagra for sale buy viagra visa
Reply Best Online Loans
1:34 PM on June 16, 2021 
easy payday loan
Reply lebron james shoes
11:25 AM on June 16, 2021 
I simply desired to appreciate you again. I'm not certain the things that I would've worked on without the entire suggestions documented by you concerning such a area. It previously was a intimidating problem for me, however , considering this well-written fashion you treated that took me to jump over joy. I'm just happy for the advice as well as have high hopes you realize what an amazing job you have been undertaking teaching many others thru your web site. More than likely you've never come across any of us.
lebron james shoes http://www.lebron18.net
Reply retro jordans
11:24 AM on June 16, 2021 
I and my guys appeared to be going through the great tactics on the website then quickly I had an awful feeling I never thanked the website owner for them. My people ended up for that reason passionate to read through all of them and already have very much been tapping into these things. Many thanks for turning out to be quite kind and then for considering this form of fabulous issues millions of individuals are really wanting to learn about. My sincere regret for not expressing appreciation to earlier.
retro jordans http://www.retro-jordans.us.com
Reply birkin bag
11:24 AM on June 16, 2021 
I have to express my appreciation to this writer just for rescuing me from this type of problem. As a result of browsing throughout the search engines and seeing methods which were not beneficial, I thought my life was over. Living devoid of the solutions to the difficulties you've sorted out by means of this review is a serious case, and the ones that could have in a negative way damaged my entire career if I hadn't noticed your site. That skills and kindness in dealing with all the pieces was crucial. I am not sure what I would've done if I had not encountered such a point like this. It's possible to at this point look ahead to my future. Thanks a lot so much for this professional and effective guide. I won't think twice to refer the blog to anybody who needs and wants direction about this area.
birkin bag http://www.hermesbirkins.com
Reply golden goose outlet
11:24 AM on June 16, 2021 
Thank you for your entire work on this web page. My aunt really loves working on research and it is easy to understand why. Almost all hear all concerning the dynamic means you present valuable guidelines on the blog and as well inspire participation from other people on the subject matter while my princess is learning a lot of things. Take pleasure in the rest of the new year. You are always conducting a useful job.
golden goose outlet http://www.goldengooseoutlets.us
Reply yeezy 700
11:24 AM on June 16, 2021 
I wish to voice my gratitude for your generosity giving support to persons who require assistance with the subject matter. Your real dedication to passing the message throughout has been wonderfully invaluable and have made workers just like me to realize their objectives. This insightful guideline indicates much a person like me and additionally to my peers. Thank you; from each one of us.
yeezy 700 http://www.yeezy-700.com
Reply birkin bag
11:23 AM on June 16, 2021 
I'm also commenting to let you know what a incredible discovery my daughter enjoyed reading through your web page. She came to find many issues, with the inclusion of how it is like to possess an ideal giving mindset to get the mediocre ones smoothly gain knowledge of selected complex things. You actually exceeded her expected results. I appreciate you for giving the informative, trusted, revealing as well as unique tips about that topic to Ethel.
birkin bag http://www.birkinbag.us.com
Reply stone island outlet
11:23 AM on June 16, 2021 
I want to point out my admiration for your generosity giving support to individuals that must have assistance with this question. Your real commitment to getting the message along had become rather informative and have specifically permitted some individuals like me to get to their goals. Your important guideline indicates a whole lot to me and even further to my peers. Regards; from each one of us.
stone island outlet http://www.stone-island.us.com
Reply curry 7 sour patch
11:22 AM on June 16, 2021 
Thanks for your entire work on this web page. Kate takes pleasure in managing investigation and it's really easy to understand why. Most of us notice all regarding the dynamic method you offer both interesting and useful guides on your web blog and as well as recommend contribution from website visitors on that situation then our daughter is in fact starting to learn a lot. Have fun with the rest of the year. Your doing a fabulous job.
curry 7 sour patch http://www.curry7.us
Reply billgood
10:06 AM on June 16, 2021 
grey black vapormax plus adidas originals attitude grau high top trainers black and green air max tn blue red shoes spain air jordan 6 mujer todas blanco limited thomas morstead mens jersey new orleans saints 6 lights out black nfl green black nike flyknit air max women for uk
billgood http://www.billgood.net/
Reply Lisabinly
9:59 AM on June 16, 2021 
where to get cialis cheap
Reply leochappaz
8:33 AM on June 16, 2021 
women nike san diego chargers 20 antoine cason elite electric blue alternate nfl jersey sale mens 2015 nike nfl carolina panthers t shirts 62 space jam jordan 11 billig womens long white blouse adidas yeezy wave runner 700 yahoo new york mets world series hat girl
leochappaz http://www.leochappaz.com/
Reply Pay Day Loan
7:46 AM on June 16, 2021 
online loan
Reply ALIEQUE
5:57 AM on June 16, 2021 
ivermectin tablets dosage
Reply Lisabinly
4:51 AM on June 16, 2021 
cialis 20 mg online
Reply Inseva
4:13 AM on June 16, 2021 
buy viagra tablets
Reply Kiabinly
8:27 PM on June 15, 2021 
cialis 20 mg discount coupon
Reply Cash Loan
8:25 PM on June 15, 2021 
loans with bad credit
Reply kevin durant shoes
6:19 PM on June 15, 2021 
I needed to create you one little bit of remark just to say thanks a lot the moment again for all the precious advice you've shown on this site. This has been quite shockingly generous with you giving extensively what exactly most of us might have marketed as an ebook to help make some dough for their own end, primarily now that you could possibly have done it if you decided. The tips likewise served like a great way to realize that some people have similar desire the same as my own to understand significantly more in terms of this problem. I am certain there are lots of more pleasant opportunities in the future for individuals that scan your site.
kevin durant shoes http://www.kevindurant-shoes.us.com
0