ASA Staffing Success - Staffing Law 2016 No. 1

staffinglawconference.net

April 20–21 Metro Washington, DC

The House and Senate in late December overwhelmingly approved—and President Obama signed—bipartisan omnibus spending legislation to fund the government for the remainder of fiscal year 2016. The package also makes a number of tax extender provisions permanent and extends others for either two or five years. While the final package is largely noncontroversial, it also suspends or delays three different taxes dealing with the Affordable Care Act.

Medical Device Tax Suspended
Under the ACA, beginning in January
2013, manufacturers of medical devices were
required to pay a 2.3% excise tax on prod-
ucts ranging from surgical tools to bed pans.
Opponents of the tax argued that it raises the
effective tax rate for manufacturers, thereby
reducing resources to create and retain jobs
and invest in new product development.
The omnibus package provides for a two-
year suspension of the medical device tax
until 2018, exempting sales during calendar
years 2016 and 2017.

Cadillac Tax Delayed Until 2020

One of the most controversial funding
mechanisms of the ACA, the so called “Cadil-
lac” tax, imposes a 40% excise tax on high-
cost, employer-sponsored health benefits.
While this tax is paid by insurers and employ-
ers, opponents of the tax argue that because
of the tax, families will see less robust plans
offered by their employers. While the tax was