Revenue Code section 4980I, as enacted by the Patient Protection and Affordable
Care Act (ACA), imposes a 40%, nondeductible excise tax on employers, health
insurance issuers, and/or other entities administering health plan benefits if
the aggregate value of “applicable employer-sponsored coverage” exceeds a
specified annual dollar limit.
year, Treasury and the Internal Revenue Service (IRS) issued Notice 2015-16 which provides initial guidance about the excise tax and describes certain approaches
Treasury and IRS are considering with regard to implementation of the excise tax.
The Notice also states that it will be followed by a second notice describing
and inviting comments about potential approaches to certain additional issues,
including procedural issues relating to the calculation and assessment of the
are responses to questions we have received regarding the excise tax and the
When is the excise
excise tax is effective beginning for taxable years beginning in 2018. It is likely that any excise tax owed
based on the 2018 tax year will be payable in 2019.
What guidance is provided in the Notice?
general, the Notice describes potential approaches to the following three
issues: (1) the definition of applicable coverage; (2) determination of the
cost of applicable coverage; and (3) application of the annual dollar limits to
the cost of applicable coverage.