Jim Nobles CAE Consolidated Nuclear Security 1015 1040 am July 16 2015 1 Cadillac Health Care Tax July 16 2015 2 What is it A permanent nondeductible annual tax on highcost employersponsored health care coverage that provides a generous level of ID: 730109
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Slide1
Cadillac Health Care Tax Overview
Jim Nobles
CAE, Consolidated Nuclear Security
10:15 – 10:40 a.m.
July 16, 2015
1Slide2
Cadillac Health Care Tax
July 16, 2015
2
What is it?
A permanent, non-deductible annual tax on high-cost employer-sponsored health care coverage that provides a generous level of
b
enefits to employees
What is it for?
To reduce tax-preferred treatment of employer-provided health care
To reduce health care spending – face true cost of care
To help finance the expansion of coverage under the Patient
P
rotection and
A
ffordable Care Act
To generate revenue to cover cost of the uninsuredSlide3
Cadillac Health Care Tax
July 16, 2015
3
Who will it impact?
Insured employees where the annual cost of coverage exceeds $10,200 for individual coverage, or $27,500 for family coverage
The excess amount is taxed at 40%, which is
NOT
tax
deductible
Adjustment might be allowed
for
retirees, age, gender, and high-risk
professions
For pre-65 retirees and individuals in high-risk professions, the threshold amounts are $
11,850
for individuals / $30,950 for
family
Thresholds to be adjusted for inflation
When
does
it
begin?
2018
Who will pay?
Employer will pay (if self-funded
)Slide4
Cadillac Health Care Tax
July 16, 2015
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What plans are included? Medical, behavioral, and prescription drug
Dental and vision (if stand-alone, might be excluded)
Health savings accounts (possibly pre-tax contributions only)
On-site medical clinics providing more than insignificant care
Retiree plans
Pre-tax coverage for a specified disease or illness
Wellness programs that are group health plansSlide5
Cadillac Health Care Tax
July 16, 2015
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What plans are excluded? Coverage for accident-only
or disability income insuranceLiability insurance (general and automobile)
Supplemental liability
insurance
Workers
compensation
Long-term care
Coverage for military sponsored by federal, state, or local governments
Employee
A
ssistance
P
rograms
Employee after-tax contributions to Health / Medical Savings AccountsSlide6
Cadillac Health Care Tax
July 16, 2015
6
Employer Considerations?Determine current cost and potential tax liability Encourage enrollment into High Deductible Plans (shift cost to the individual)
Modify coverage tiers to follow the single/family tax thresholdsConsider in union negotiations before 2018
Communicate (HR, CFO, Contracts, Senior Management, Audit Committee / Board)
DOE/NNSA
position?
Cost / tax
will be unallowable
Other government action?
February 2015 – IRS issued a notice concerning the tax and requested comments by May 2015
April 2014 – Senate Finance Committee introduced bill to repeal the tax