The Affordable Care Act (ACA) has serious tax implications that have made headlines recently in Washington, D.C. as the IRS provided guidance and the U.S. House of Representatives introduced a related bill.

IRS Seeks Comments on ACA Excise Tax

Earlier this week, the IRS issued a 24-page notice requesting comments in advance of regulatory guidance for the excise tax on high-cost employer-sponsored health coverage. This excise tax on high-cost health plans is one of the last ACA provisions to be implemented and is scheduled to take effect in 2018.

Dubbed the “Cadillac Tax” because it targets benefit-rich plans, this tax provision assesses a 40% excise tax on health plans that exceed an established annual cost. Insurers and plan sponsors are responsible for paying the tax.

Specifically, the IRS is seeking comments on how to define applicable coverage, determine the cost of that coverage and adjust the statutory dollar thresholds that govern when the tax kicks in. Comments are due by May 15, 2015.

Rep. Guinta Introduces ACA/Tax Bill

On Feb. 11, Rep. Frank Guinta (R-New Hampshire) introduced H.R. 879, the “Ax the Tax on Middle Class Americans’ Health Plans Act.” This legislation would repeal the same 40% excise tax on high-cost health plans that is scheduled to take effect in 2018.

Over the course of the next several months, the Big “I” expects more legislation addressing this excise tax. The association supports the repeal or delay of the excise tax and will continue to work with Congress on any efforts related to this damaging ACA provision.

Wyatt Stewart is Big “I” director of federal government affairs.