After a brief government shutdown, a stopgap funding measure was signed on Jan. 22 that also contains a few provisions that makes changes to the federal Affordable Care Act and will have a direct impact on certain employer plans. Among the notable changes are:
- A two-year delay of the “Cadillac” tax – the ACA provision that levies a 40 percent excise tax on the cost of healthcare plans above specific IRS limits delays the tax an additional two years, setting its new effective date to 2022. According to financial consulting firm Conrad Seigel, the delay on the tax (this is the second time it has been delayed), coupled with bipartisan opposition to it has raised speculation over whether the “Cadillac Tax” will ever be fully implemented.
- One-year suspension of the Health Insurer’s Tax in 2019 – Two years ago, Congress and the president issued a one-year suspension on HIT – a provision in the ACA that imposes a tax on health insurers. The delay was in place for 2017, so the tax became effective again this year.
- Two-year suspension of the Medical Device Tax – A 2.3 percent excise tax on U.S. medical device revenues was delayed in 2016 and 2017 and under the new law will continue to be suspended through 2018 and 2019.
- Restoration of federal funding to the Children’s Health Insurance Program – The new stopgap funding bill provides an additional six years of federal funding for CHIP, following months of speculation about the program’s future after its budget expired on Sept. 30 of last year. The funding will assist states in providing health coverage to children and pregnant women in need.