SAN ANTONIO – The new Cadillac plan excise tax could force health insurers to keep close watch on insureds’ overall benefits packages.
Seth Perretta, a partner at Crowell & Moring L.L.P., Washington, talked about the slippery nature of the new tax in a breakout session here at the annual convention of the National Association of Health Underwriters, Arlington, Va.
The issue came up while Perretta was talking about the new Internal Revenue Service (IRS) Form W-2 reporting requirements for employer-sponsored group health coverage.
The Patient Protection and Affordable Care Act of 2010 (PPACA) is supposed to impose the Cadillac plan tax in 2018. The 40% tax will apply to health plan value over a specified threshold.
The party that pays the tax will either by the insurer that provides the plan or, in the case of a self-insured plan, the employer that sponsors the plan.
In part to start the process of implementing the tax, and in part to give policymakers more information about expenditures on group health benefits, the IRS will be asking for voluntary reports on group health expenditures for 2011 and requiring group health expenditure reports for 2012.
Employers will report the expenditures using code DD in W-2 Box 12, Perretta said.