American Benefits Council
Benefits Byte


November 25, 2015

The Benefits Byte is the American Benefits Council’s regular e-mail and online newsletter for members only, providing timely reports on legislative, regulatory and judicial developments, along with updates on the Council’s activities in support of employer-sponsored benefit plans.

The Benefits Byte is published by the American Benefits Council, based on staff reports and edited by Jason Hammersla, Council director of communications. Contact information for Council staff related to specific topics can be found at the end of each story.

Click here to read past issues on the Benefits Byte Archive page.

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Possible Two-Year Delay of 40% ‘Cadillac Tax’ Under Discussion

Although members of Congress departed for the Thanksgiving holiday this week, reports have emerged that serious discussions are underway for a possible two-year delay of the 40 percent so-called “Cadillac Tax” on high-cost plans. The delay is among a number of items being considered for inclusion in legislation that would extend expiring tax provisions and continue funding of government operations beyond December 11.

There are conflicting reports as to whether the White House is directly engaged in the discussion of this effort, or whether it is being conducted, for now, just among the Republican and Democratic congressional leadership. 

As reported by Tax Analysts, the deal under discussion would also delay the medical device tax and provide additional funding for the so-called “risk corridors” under the Affordable Care Act (ACA) that provide payments to health plans. Separate provisions would permanently extend the earned income and child tax credits as well as the research and development tax credit.

Other informal reports suggest that the House of Representatives Ways and Means Committee will begin to consider the “tax extenders” bill, along with the various associated items, as early as Monday, November 30 when Congress returns from the holiday recess.

The Council, along with the Alliance to Fight the 40, a diverse coalition of stakeholders that the Council organized earlier this year, continues to advocate for full repeal of the 40 percent tax. We urge interested Council members to continue doing so, as well, in order to keep pressure applied on Congress to address the issue (see the November 17 Action Alert for more details.)

We will report to our membership on any emerging developments as they occur. For more information on the 40 percent tax and the Council’s repeal efforts, contact Katy Spangler, senior vice president, health policy, at (202) 289-6700.

The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.

Notice: the information contained herein is general in nature. It is not, and should not be construed as, accounting, consulting, legal or tax advice or opinion provided by the American Benefits Council or any of its employees. As required by the IRS, we inform you that any information contained herein was not intended or written to be used or referred to, and cannot be used or referred to (i) for the purpose of avoiding penalties under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party any transaction or matter addressed herein (and any attachment).