Stop losing sleep over your tax situation. I'm Darrin Mish — a tax attorney in Tampa who's spent 32 years handling exactly this kind of problem. Here's what you need to know.
Writing in Forbes, Robert W. Wood forecasts the long term impacts of a particularly complex provision of the Affordable Care Act. The so-called “Cadillac Tax” represents a hefty punitive tax imposed on entities supplying health care coverage through private employer health care plans instead of exchanges.
Mr. Wood predicts that in the long run, the Cadillac Tax will reduce the health care assistance benefits enjoyed by employees. The provision will likely cause employers to offer less generous health care benefits.
Another impact of the complicated provision will involve the collection of additional revenue by the federal government. Analysts surmise the provision will result in the collection of some $80 billion between 2018 and 2023.
Beginning in 2018, the IRS will collect 40% on the cost of individual health plans above $10,200 for individuals and $27,500 for families. Employers cannot deduct their contributions, although both employer and worker contributions fall under the excise tax provisions. These payments face taxation at a 40% rate on every dollar above the designated limit.
Employers must pay taxes for health savings accounts and Archer medical savings accounts. Health insurance issuers pay them for health coverage offered through group health insurance plans.
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