The IRS is coming for you. Part of the Affordable Care Act is to gain tax revenue to offset the increase in uninsured and to support premium subsidies
On July 30, the Department of the Treasury and the Internal Revenue Service (IRS) issued a second notice regarding the 40% Excise Tax a.k.a. the Cadillac Tax. The notice provides information on possible approaches that are being considered for administering the Cadillac Tax and continues the process of gathering input that will be used to develop regulations.
What are the proposed thresholds?
Second 40% Excise Tax ("Cadillac Tax") Notice Issued
The new tax is retrogressive and is actually a double taxation, not allowing any deduction against income, sales, or excise taxes. There is also no mention of how state tax would be impacted.
The notice reveals a poorly constructed, and poorly thought out notice. The ACA law is so non-specific in regard to taxes. It already includes penalties to non-compliant patients in regard to obtaining health insurance, medical device taxes, and now this latest round of mining for scarcer health care dollars.
The mechanism for controlling cost is to tax any excessive premium to penalize all those concerned, even if the benefits are excellent. The Dept. of HHS cares not one bit about quality or excellence of the healthcare delivered. It wants to reduce it's costs, in a CATCH 22 scenario.