ERIC filed its comment letter with IRS/Treasury on May 15 in response to Notice 2015-16 requesting guidance on the ACA 40% excise tax. ERIC made the following major points in its letter:
- We would like a two-year transition period to cope with the major changes that would otherwise need to be made to our plans and systems before 2018;
- Employers should be given tremendous flexibility to determine what coverage is subject to the tax and how the coverage is valued;
- We tried to list all the different types of on-site and near-site medical clinics that should not be subject to the excise tax, and we requested a safe harbor for clinics that spend less than $700 annually (indexed) per individual;
- Flexibility is key;
- Health savings accounts (HSAs) should not be subject to the tax; if this is not done, at a minimum, pre-tax employee contributions to HSAs should not be subject to the excise tax;
- Employers should be able to use any actuarially reasonable cost determination in deriving the value of applicable coverage subject to the excise tax; and
- The IRS should create an “excise tax safety zone” so that plans with an actuarial value of 90% or less would not be subject to the excise tax.