• MFG Benefits

Three Health Insurance Taxes Repealed; One Fee Reinstated



President Donald Trump signed a bill into law that not only funds the federal government through fiscal year 2020, but also affects employers and employees’ health benefits.

The bill repeals three taxes that were enacted to fund the 2010 health care reform act known as Obamacare. The taxes include:

Sec. 4980I — also known as the Cadillac Tax — was a 40 percent excise tax on certain high-cost employer sponsored health plans.

Sec. 4191 was a medical device excise tax that was imposed a 2.3 percent tax on domestic sales of medical devices.

Section 9010 was an annual fee on health insurance providers.

All three taxes previously had been postponed or suspended.

The bill also reauthorizes the Patient-Centered Outcomes Research Institute (PCORI) fee on those who sponsor certain types of self-funded health plans and on fully insured carriers. PCORI had expired for plan years ending after Oct. 1, 2019, but now will run through 2029.

The fee helps fund the Patient-Centered Outcomes Research Institute (PCORI), a non-profit government-sponsored organization charged with investigating the relative effectiveness of medical treatments, making health care more affordable and improving workplace productivity.

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