June 28, 2022

Volume XII, Number 179

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June 28, 2022

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June 27, 2022

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Delay of Affordable Care Act reporting and Cadillac Tax

Dec. 2015 brought important (and welcome) delays to employers regarding two significant Affordable Care Act (ACA) provisions.

ACA reporting requirements

Under the ACA, employers that sponsor health plans generally are required to comply with certain annual information reporting requirements related to those plans. For example, “applicable large employers” (generally, employers with 50 or more full-time employees and equivalents during the preceding year) must (1) file Internal Revenue Service (IRS) Forms 1094-C and 1095-C with the IRS, and (2) distribute a Form 1095-C to certain employees containing detailed health plan coverage and other information for each month of the calendar year.

On Dec. 28, 2015, the IRS extended the due dates for the ACA information reporting requirements for 2015. The extensions apply with respect to both the filing of forms with the IRS and distribution of forms to individuals. Specifically, the IRS extended the due date (1) for filing 2015 forms with the IRS from Feb. 29, 2016 to May 31, 2016 for paper filers and from March 31, 2016 to June 30, 2016 for electronic filers, and (2) for furnishing 2015 forms to employees from Feb. 1, 2016 to March 31, 2016.

Cadillac plan tax

The ACA imposes a forty percent (40%) excise tax on the portion of certain high-cost employer-sponsored coverage that exceeds a threshold amount (the Cadillac Tax). On Dec. 18, 2015, Congress passed and President Obama signed into law the Consolidated Appropriations Act of 2016 which includes a two-year delay of the implementation of the Cadillac Tax from 2018 until 2020. In addition, the Cadillac Tax originally qualified as a non-deductible tax for employers. However, a deduction for Cadillac Tax payments will now be permitted.

Bipartisan support for the elimination of the Cadillac Tax has been significant, but it remains to be seen whether it will be repealed altogether. Therefore, for now, employers should plan for the implementation of the Cadillac Tax in 2020.

Copyright © 2022 Godfrey & Kahn S.C.National Law Review, Volume VI, Number 28
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About this Author

Daniel Barnes Employment & Tax Attorney
Associate

Daniel Barnes is an associate in the Employee Benefits and Tax Practice Groups in the Milwaukee office.

Daniel focuses his practice on employee benefits and executive compensation. He has extensive experience with compliance issues related to the Affordable Care Act (ACA), including assisting employers with meeting the requirements of the employer mandate, navigating the ACA’s information reporting requirements, and designing and implementing self-funded health plans in a manner to comply with the ACA’s market reform provisions. Daniel also has experience assisting employers and...

414-287-9322
Todd Cleary Employee Benefits Attorney
Shareholder

Todd Cleary is a shareholder in the firm’s Employee Benefits Practice Group. Todd works extensively with retirement plans, such as ESOPs, pension, profit sharing, 401(k), 403(b), 457, cash balance, SIMPLE and SEP plans. Todd’s experience with welfare plans includes the design and compliance of medical plans (including issues related to ERISA, COBRA and HIPAA), wellness programs, cafeteria plans, disability plans (short-term and long-term), and group term life insurance plans. Todd has also worked with nonqualified deferred compensation plans, multiple employer welfare arrangements (MEWAs...

608-284-2613
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