The IRS is requesting comments on the upcoming 40-percent excise tax on high-cost employer-sponsored health plans, which as currently conceived would apply to Tribal governments and Tribal-owned businesses that provide expansive health care insurance for their workers. Under the Affordable Care Act, the so-called “Cadillac tax” goes into effect in the beginning of 2018 for both fully insured and self-funded employer health plans. The tax will be assessed on the dollar amount of any premium that exceeds the annual limits of $10,200 for individual coverage and $27,500 for family coverage. The tax also includes several other costs such as contributions to flexible spending accounts or health savings plans. Tribal governments in high cost of living regions, such as Alaska, the Northeast, and the West Coast will likely be hit the hardest. In addition to the taxes, there will be a significant administrative burden on tribal government finance and HR staff to complete the mandated reporting. The costs and burdens represented by the regulations will diminish already limited resources available to support tribal government operations.
Comments on Notice 2015-52 can be sent electronically to firstname.lastname@example.org.