Archived Insight | January 28, 2020

Appropriations Acts: Health and Fringe Benefits

The end-of-year spending legislation enacted on December 20, 2019 has important implications for group health plans and employer-sponsored fringe benefits. The spending legislation is contained in two acts called the Consolidated Appropriations Act and the Further Consolidated Appropriations Act.

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Repeal of ACA taxes

The Act permanently repeals three taxes included in the Affordable Care Act (ACA):

  • The 40 percent excise tax on high-cost health plans (often called the “Cadillac tax”);
  • The health insurance provider fee (for calendar years starting after December 31, 2020); and
  • The medical device tax (for sales after December 31, 2019).

The excise tax on high-cost health plans, which was scheduled to go into effect January 1, 2022, and the medical device tax, which was suspended from 2016 through 2019 but scheduled to go into effect in 2020, will now be permanently repealed. The health insurance provider fee was suspended for 2017 and 2019, but it will be in effect for 2020 and repealed for 2021 and thereafter.

Congress did not change employer and/or plan reporting requirements included in the Affordable Care Act, including W-2 reporting and reporting health insurance coverage and offers of coverage to full-time employees on Forms 1095-B and 1095-C.

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.

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