Taxes and Fees Enacted as Part of the Affordable Care Act

Background and Provisions. The Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended by P.L. 111-152) contains a number of tax provisions that serve different purposes. Some of the more well-known provisions, such as the individual mandate and employer penalty, have revenue and budgetary effects but are primarily intended to encourage health insurance coverage. The focus of this product is a number of other taxes and fees enacted as part of the ACA that primarily serve to raise revenue. Tax on High-Cost Employer-Sponsored Coverage Effective 2022, a 40% excise tax, also referred to as the “Cadillac tax,” is to be assessed on the aggregate cost of employer-sponsored health coverage that exceeds a dollar threshold. The thresholds are adjusted for eligible retirees, workers in certain high-risk professions, and plans whose demographics differ significantly from the national workforce. The thresholds are also adjusted for inflation. Increased Medicare Payr