Initial "Cadillac Tax" Guidance Released

The Internal Revenue Service released initial guidance on the Affordable Care Act's "Cadillac Tax" which is set to take effect in 2018.  The IRS says that  Notice 2015-16 (http://www.irs.gov/pub/irs-drop/n-15-16.pdf) is intended to “initiate and inform the process of developing regulatory guidance” and addresses several aspects of the Cadillac tax relating to: (1) the definition of applicable coverage; (2) the determination of the cost of applicable coverage; and (3) the application of the annual statutory dollar limit to the cost of applicable coverage.   

 

The IRS anticipates issuing another notice, before the publication of proposed regulations, describing potential approaches to a number of issues not addressed in Notice 2015-16, including procedural issues relating to the calculation and assessment of the excise tax.