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March 04, 2015 at 11:33 AM
The Internal Revenue Service (IRS) is asking commenters for ideas about how it ought to write the rules for the “Cadillac plan tax.”
IRS officials have put the request for commenters’ thoughts in IRS Notice 2015-16, which deals with Internal Revenue Code (IRC) Section 4980I.
Drafters of the Patient Protection and Affordable Care Act (PPACA) added IRC Section 4980I to impose a 40 percent excise tax on “high cost employer-sponsored coverage,” in an effort to raise revenue and mobilize employers and insurers to help hold down the overall cost of health care and health benefits.
Some Republicans also accept the idea of setting a cap on tax breaks for high-value health coverage.
PPACA calls for the Cadillac plan tax to apply for tax years starting after Dec. 31, 2017. In 2018, the tax could apply to individual coverage with a value of at least $10,200 and family coverage with a value of at least $27,500.
Officials at the IRS, an arm of the Treasury Department, are asking for commenters’ thoughts on how the IRS ought to define “applicable coverage” for Cadillac plan tax purposes, determine the cost of that coverage, and adjust the statutory dollar thresholds that govern when the tax kicks in.
Comments are due May 15.
The IRS expects to ask for another round of comments later this year, to get ideas about how to calculate and assess the excise tax, officials say.
The IRS listed Karen Levin of the Office of Associate Chief Counsel for Tax Exempt and Government Entities as the principal author of the notice.
For a look at the kinds of questions Levin and her colleagues are asking, read on.
