The Bloomberg BNA Payroll Library gives you reliable, up-to-date guidance and analysis in every area of payroll administration and compliance, and includes hundreds of interactive forms and links to related federal, state, and local sites.
Initial guidelines on the Affordable Care Act's 40 percent excise tax on high-cost “Cadillac” health plans, which is to take effect in 2018, were released Feb. 23 by the Internal Revenue Service.
Notice 2015-16 addresses several areas under Internal Revenue Code Section 4980I, including the definition of applicable coverage, how the cost of the coverage is determined and “the application of the annual statutory dollar limit to the cost of applicable coverage.”
The statute provides two baseline dollar limits for the 2018 plan year: $10,200 for self-only coverage and $27,500 for other-than-self-only coverage. Adjustments are to apply to increase those amounts.
The existing method to determine the cost of employer-provided coverage on Forms W-2 is not intended to be related to the Section 4980I calculations, the IRS said. However, as guidelines under Section 4980I develop, “improved methods for determining the cost of applicable coverage” may be applied for consistency to W-2 reporting criteria, the notice said.
Generally, the cost could be based on the amount former employees would bear to continue coverage under an employer's plan after leaving employment under COBRA requirements, the IRS said. The agency plans to include in the calculations for the cost of coverage employer contributions to health savings accounts and health flexible-spending arrangements. Health-reimbursement account amounts also could be added to the equation, the notice said.
Nearly half of U.S. employers anticipate triggering the excise tax in 2018, a survey by the consulting company Towers Watson said Sept. 23, 2014.
The IRS and the Treasury Department plan to release another notice before issuing proposed rules under Section 4980I. The upcoming notice would address issues not found in Notice 2015-16, including procedural issues related to the calculation of the tax and how it would be assessed, the notice said.
Comments on Notice 2015-16 are due to the IRS by May 15.
To contact the editor on this story: Michael Trimarchi at email@example.com.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)