Updated February 2018: ACA Fees and Taxes for Fully Insured and Self-Funded Groups

Due to legislative changes, certain taxes related to the Affordable Care Act have been delayed.

The Cadillac Tax, which is an excise tax on high-cost employer-sponsored health coverage, has been delayed until 2022. Under this law, employers will be required to pay a 40% tax on the portion of an employee's total health insurance premium (employer and employee contributions) that exceeds a predetermined threshold. Currently, the thresholds are $10,200/year for individual coverage and $27,500/year for family coverage. These amounts may be increased for high-risk professions, such as law enforcement, and certain age and gender demographics. The thresholds will be adjusted for inflation when the law goes into effect in 2022.

The Health Insurer Fee, or Health Insurance Tax, is used to fund the state and federal Exchanges. The tax is charged to insurers who offer fully insured health plans, including Medicare Advantage, Medicaid managed care plans, and individual and small group employer plans. Payment of the tax is required for 2018, but Congress has suspended collection of the tax for 2019.

Download a chart outlining the specific provisions and correlating fees/taxes.

Please contact your Optima Health representative if you have any questions.

See the previous update from October 31, 2017 for more information.

* This information is intended to be a high-level summary of some of the changes to the ACA tax provisions. Optima Health is providing this to consumers and employers for informational purposes only. The information is not intended to provide compliance, tax, or legal advice, or to be relied upon for these purposes. Consumers and employers are advised to consult with legal and tax experts to understand how the law will affect their individual or business circumstances.