In a bipartisan effort, the U.S. Congress agreed on a spending package to fund the federal government which included important changes to federal laws affecting employer-sponsored group health and welfare benefit plans. The legislation was signed into law by the President on December 20, 2019.
The law repeals the following taxes under the Affordable Care Act (“ACA”):
• 40% tax on high cost health plans (a.k.a., the “Cadillac Plan Tax”) after December 31, 2019.
• 2.3% medical device tax on sales after December 31, 2019.
• Annual Health Insurer Tax (“HIT”) for calendar years beginning after December 31, 2020.
In an interesting turn of events, the new law reinstates the Patient-Centered Outcomes Research (PCOR) fee through September 30, 2029 for insured and self-funded health plans. Prior to enactment of this new law, many plans had paid their final PCOR fee as July 31, 2019 or were scheduled to pay their final assessment on July 31, 2020. With reinstatement of the fee, insured and self-funded plans will continue with these payments into 2029 and (in some cases) 2030. More guidance will be issued from the IRS as to future PCOR fee amounts and process.
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