Category Archives: Flexible Spending Accounts


By: Zack Pace, SVP, Benefits Consulting

In the wake of the Supreme Court’s King v. Burwell Affordable Care Act (ACA) subsidy opinion, CBIZ asked me to write an essay summarizing the decision’s impact for employers. However, I pointed out that my colleague Karen McLeese had already accomplished that task in ten words. Her 111th Health Reform Bulletin summarized the King v. Burwell opinion as follows:

In summary, it is business as usual for the Affordable Care Act.

Thus, I suggested that my essay instead focus on the ACA chores employers should complete this summer. This graphic summarizes my suggestions:

ACA Chores with Contact Info  r1

The resulting essay is available here: Let’s finish up our ACA chores this summer.

Further reading:

  1. 10 ACA employer shared-responsibility reporting tips
  2. Cadillac tax hurricane preparation: After-tax HSA contributions

Zack Pace is a Senior Vice President, Benefits Consulting at CBIZ, Inc. He can be reached at Follow him on LinkedIn and Twitter at @zpace_benefits


The Cadillac Tax Hurricane Reaches the Caribbean Sea

ACA Cadillac Tax

By: Zack Pace, SVP, Benefits Consulting

The ACA Cadillac Tax is a patient, powerful hurricane moving across the Atlantic. If it makes landfall, the impact will be dramatic. Late last spring, we observed the storm Building off the African Coast and provided a long-range forecast.

Just last week, this storm reached the Caribbean Sea, Hurricane Hunter Aircraft made initial observations, and Treasury issued its first official forecast via IRS Notice 2015-16. Of note:

  1. Flexible Spending Accounts (FSAs) and Health Reimbursement Arrangements (HRAs) are in grave danger
  2. Employer and pre-tax employee contributions to Health Savings Accounts are in peril
  3. Excepted Dental & Vision plans will likely be spared

While some remain hopeful that this hurricane will veer off into the North Atlantic before 2018, the bipartisan support that seems to be building for retaining this tax in one form or another is worth considering. For example, the Hatch-Burr-Upton Plan, as reported by Business Insurance, essentially transfers the tax from the insurer to the individual.

Hurricane preparation strategies for employers to consider:

  1. If offering FSAs, begin letting employees know that FSAs might go away
  2. If offering HRAs, begin preparations to retire the HRA
  3. If contributing to HSAs, evaluate shifting those contributions towards employee premium contribution reductions
  4. If allowing employees to contribute to HSAs pre-tax via your Section 125 plan, consider if you would facilitate after-tax contributions
  5. If sponsoring Dental & Vision plans, double-check that the plans meet the definition of Excepted. See our bulletin: IRS Pronouncements.
  6. Determine the possible overall increase to your payroll taxes

While we should begin preparation this year, we can hold off on buying duck tape and plywood for another year or so.

Thank you for reading this post. We’ll continue to monitor and evaluate the impact of the Cadillac Tax in the months ahead. If you have questions about the impact to your organization and your employees, we’re here to help. Please consider subscribing for updates via the upper right hand section.

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