President Signs Further Consolidated Appropriations Act 2020: ACA Tax Changes You Need to Know

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President Signs Further Consolidated Appropriations Act 2020: ACA Tax Changes You Need to KnowPresident Trump signed important legislation in December 2019 that will impact many employers. H.R. 1865, or the “Further Consolidated Appropriations Act of 2020”, brings changes to the Affordable Care Act (ACA). While the ACA hasn’t been repealed altogether, the president has repealed three key taxes imposed by the ACA. These, and several other notable changes for retirement, health, and welfare provisions, may affect how your business manages ACA and other critical benefit programs.

Are you ready for these changes? Here’s what you need to know.

ACA Taxes and Other Healthcare Legislative Changes for 2020

The “Act” contains numerous changes to the ACA as well as other retirement, health and welfare programs. While all the legislative changes in H.R. 1865 are notable, the ACA changes are of great importance.

Three ACA taxes have been repealed including the Cadillac Tax, Medical Device Tax, and an Insurance Provider Fee. Each of these taxes have been controversial in the past and have caused disruption in several business sectors.

Below is a brief description of three taxes imposed under the ACA that would be repealed under H.R. 1865:

  • Cadillac Tax: This tax was intended to take effect in 2018 applying to the employer health plans that cost more than $10,200 for individuals or $27,500 for families. The Cadillac Tax will not take effect until 2022. The tax rate will be set at 40% of coverage costs that exceed those thresholds and will be adjusted for inflation on an annual basis.
  • Medical Device Tax: This was a 2.3% tax on medical devices and was most recently suspended until December 31, 2019. The tax would have applied to eligible devices sold by manufacturers, producers or importers, such as hip and knee implants, pacemakers and the like.
  • Insurance Provider Fee: This was an annual fee that would be imposed on health insurance providers.

A few other health and welfare provisions from the Act include:

  • Increase minimum age to buy tobacco from 18 to 21
  • Reduction in Medical Expense Deduction
  • Above the Line Deduction for Qualified Tuition and Related Expenses
  • Employer Credit for Paid Family and Medical Leave

For more details, see a copy of the Act here.

What These Changes Mean For Employers

While the ACA has yet to be repealed, it remains in constant fluctuation. Though these three ACA taxes have been repealed, providing relief to many businesses, the ACA remains a detailed, confusing piece of legislation—not to mention a thorn in the side of many human resources and payroll professionals. Capturing the data necessary for reporting and preparing reports on time hasn’t gotten any easier.

All this ACA confusion is why Integrity Data continuously enhances our ACA Compliance Reporting services. We’ve been laser-focused on ACA from the very beginning – before it became law – and have developed a full-service solution to save time and frustration. We work with any ERP and/or payroll system and you don’t need any extensive training or maintenance because we do it all for you!

We have you covered, from year-round penalty risk management, to creation of IRS Forms 1095-C and 1094-C, e-filing, secure storage, support, and more. Not only are you are backed by state-of-the-art software, you are backed by a team of ACA experts dedicated to staying up to date and implementing the latest changes for you.

Prepare for ACA Changes and Remain ACA Compliant

Are you tired of dedicating staff and resources to the ever-changing ACA legislation? Sign up for a free ACA consultation. Learn more about our proven solution, read our customer testimonials and watch our video to learn more about our services. Give us a call any time to talk about simplifying your ACA reporting.

Written by Integrity Data

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