By: Zack Pace, SVP, Benefits Consulting
Bill Smith, Managing Director, National Tax Office
As we discussed earlier this year, if the Cadillac Tax forecast provided via IRS Notice 2015-16 proves accurate, it’s not difficult to predict the impact to most employer sponsored plans, beginning in 2018. For example, it’s likely that:
- Flexible Spending Accounts (FSAs) and Health Reimbursement Arrangements (HRAs) will go away.
- Employer and pre-tax employee contributions to Health Savings Accounts (HSAs) will end.
- Most employers will eventually need to drop all health plans except for Qualified High Deductible Health Plan (HDHPs).
However, regarding #2, even if pre-tax employee HSA contributions via the Section 125 Plan are discontinued, employers may allow employees to continue contributing on an after-tax basis to their HSAs. In my travels, I’ve received many questions from employers about the mechanics and benefits of this available arrangement. In my latest Employee Benefit News column, my colleague Bill Smith and I dove into this topic and flushed out the key Q&A: Cadillac tax hurricane preparation: After-tax HSA contributions. The topic seemed to resonate with readers as it was the #1 most read Employee Benefit News column for some time. We hope you find the essay beneficial.
The full article is available here: Cadillac tax hurricane preparation: After-tax HSA contributions.
What other benefit topics and questions are on your mind? Please let me know, and I’ll write about them in future Employee Benefit News essays. You can reach me on firstname.lastname@example.org or via Twitter. My collection of LinkedIn essays is located here.
Bill Smith is the Managing Director, National Tax Office at CBIZ MHM, LLC.