The federal spending bill signed into law at the end of 2019 repealed three taxes and fees under the Affordable Care Act (ACA):
• The Cadillac tax
• The medical devices excise tax
• The health insurance providers fee
The Cadillac Tax
The Cadillac tax is a 40% excise tax on high-cost group health coverage. Its effective date was previously delayed several times. This tax is now fully repealed, beginning with the 2020 tax year.
The Medical Devices Excise Tax
The medical devices tax is a 2.3% excise tax on the sales price of certain medical devices. This tax is fully repealed beginning in 2020.
Health Insurance Providers Fee
The health insurance providers fee is an annual fee imposed on the health insurance sector. This fee is repealed beginning with the 2021 calendar year. Employers should be aware of the evolving applicability of existing ACA taxes and fees so they know how the ACA affects their bottom lines.