Further Consolidated Appropriations Act of 2020 and ACA Taxes

On Friday night, December 20, President Trump signed two spending bills that keep the federal government funded until September 20, 2020. 

One of the bills was called the Further Consolidated Appropriations Act of 2020. This omnibus bill includes many provisions beyond keeping the federal government running.  For example, it extends the Work Opportunity Tax Credit (WOTC); the federal tax credit for employers that provide paid family and medical leave; and several immigration-related programs, including E-Verify.  The bill also provides several improvements in 401(k) rules.

However, this bill also addresses the Affordable Care Act in these important ways:

  1. The Cadillac tax is fully repealed and not kicked down the road beyond January 2022.
  2. The excise tax on medical devices is repealed effective December 31, 2019.
  3. The excise task in health insurers (some call this the ACA Market Share Fee or the Health Insurer Fee) is repealed effective January 1, 2021. 
  4. The PCORI fee, which was supposed to expire for plan years ending after September 30, 2019, has been extended for another 10 years.  It will continue to have an inflation-adjusted mechanism.

Since the PCORI fee has not been a “big ticket” item, its continuance will likely not require self-funded employers to revise their 2020 health budgets or rates.

We will continue to keep you advised as we learn more about the impact of these spending measures.

Questions? Please contact the Findley consultant you regularly work with or Bruce Davis at Bruce.Davis@findley.com or 419.327.4133.

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Posted December 23, 2019

Category: Findley Post, Health and Group Benefits