8881 / Prior to its appeal, what types of employer-provided health coverage were expected to be included in determining whether an employer was liable for the ACA Cadillac tax?

Preliminary IRS guidance indicated that many types of employer-provided health benefits (in addition to traditional health insurance premiums) would be counted in determining whether the employer would be subject to the ACA “Cadillac tax” on high cost health coverage. An employer was to become liable if it offered employer or salary reduction contributions to a health savings account (HSA) or health flexible spending account (FSA) that it administers.

Pre-tax contributions to HSAs were likely to be included in determining whether an employee’s health coverage was subject to the Cadillac tax, but an employee’s after-tax contributions were not included in the calculation.

The cost of health FSAs, Archer MSAs, HRAs, retiree coverage and multi-employer plan coverage were also expected to be included when calculating whether the threshold that triggers the Cadillac tax was crossed.¹