2016 Federal Budget Delays ACA’s Cadillac Tax & Suspends Two Other Taxes

The new federal budget for 2016 delays implementation of the ACA’s Cadillac tax on high-cost group health coverage for two years, until 2020.

On Dec. 18, 2015, President Barack Obama signed a federal budget bill for 2016 into law, which makes significant changes to three tax provisions under the Affordable Care Act (ACA). This new law:

  1. Delays implementation of the ACA’s Cadillac tax on high-cost group health coverage for two years, until 2020;
  2. Imposes a one-year moratorium on the collection of the ACA’s health insurance providers fee, for 2017; and
  3. Imposes a two-year moratorium on the ACA’s medical device excise tax, for 2016 and 2017.

The provisions affecting these ACA taxes took effect immediately, once the bill was enacted.

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