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The Wagner Law Group Description 

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 


Established in 1996, The Wagner Law Group has 22 attorneys engaged exclusively in employee benefits, estate planning and employment law. Six of our attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards. The firm is among the largest ERISA boutiques in the country. Our practice is national in scope, with clients in more than 40 states and several foreign countries.






Contact Info

The Wagner Law Group


  Integrity | Excellence


Massachusetts Office 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110

Florida Office 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418


San Francisco Office

Tel: (415) 625-0002

Fax: (415) 358-8300

315 Montgomery Street

Suite 904

San Francisco, CA 94104







March 5, 2015


 Health and Welfare Law Alert




 IRS Issues Guidance on ACA's Cadillac Tax




The IRS has issued guidance on the Affordable Care Act's ("ACA's") 40 percent excise tax on high-cost, employer-sponsored group health plans (i.e., the "Cadillac tax"), which is currently scheduled to begin in 2018. In Notice 2015-16, the IRS discusses a number of issues concerning the tax, including the types of coverage that will be subject to the tax and how the tax will be calculated


Background. Beginning in 2018, the ACA currently provides that a non-deductible 40 percent excise tax will be imposed on "applicable employer-sponsored coverage" in excess of statutory thresholds (in 2018, $10,200 for self-only, $27,500 for family). Employers' efforts to mitigate possible exposure to this tax have been limited because of the uncertainty over what types of health coverage will be subject to the tax and how the tax is to be calculated.


Notice 2015-16. Notice 2015-16 addresses the definition of applicable coverage, how the cost of applicable coverage is to be determined and the application of the annual statutory dollar limits.


Applicable Coverage. The Notice provides the following on what constitutes applicable coverage subject to the tax: 

  • Covered status is determined without regard to whether the employer or employee pays for the coverage, whether coverage is paid on a pre- or post-tax basis, or whether coverage is insured or self-insured.
  • Under the ACA, only insured dental and vision benefits are excluded from the excise tax. However, the IRS is considering adopting a policy under which both insured and self-insured dental and vision benefits are excluded from the excise tax, provided that the benefits are offered under stand-alone plans that satisfy the revised rules on excepted benefits.
  • Coverage includes, but is not limited to, health flexible spending accounts, health savings accounts (and Archer medical savings accounts), health reimbursement accounts, coverage for on-site clinics, governmental plans, retiree coverage and multiemployer plans.  

Cost of Applicable Coverage. The Notice provides the following about how the cost of coverage will be determined: 

  • IRS will adopt an approach similar to that used to determine applicable premiums under COBRA where the applicable premium is based on the cost of coverage for similarly situated non-COBRA beneficiaries. COBRA prescribes two methods for self-insured plans to calculate COBRA premiums: the actuarial basis method and the past cost method.
  • The cost of applicable coverage refers to coverage in which an employee is enrolled as opposed to coverage merely offered to an employee.
  • Any coverage under a multiemployer plan is treated as other-than-self-only coverage.





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This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.