In a somewhat surprising turn of events, the President is preparing to sign two legislative packages that, among other things, annihilate huge taxes under the Affordable Care Act. The Cadillac tax, the Health Insurer Industry Tax (HIT) and the 2.3% medical device tax have been eliminated going forward. What is more surprising is the fact that the bill does not accommodate a ‘surprise medical bill’ prohibition, nor any measures to reduce prescription drug price increases for the coming year.

As a reminder, the Cadillac Tax was set to take effect in 2022 after a few delays, and would be applied at 40% to employer sponsored plans exceeding certain threshold amounts ($11,200 for single tier coverage, and $30,100 for all other tiers of coverage). These thresholds  would have included funding arrangements where employers contribute any amount of money to HSAs, HRAs, and FSAs as well. Taking this tax off the docket will be a huge relief to employer plan sponsors.

Though the HIT will be repealed in the future, its worth noting that it is still in effect for 2020. This means employers will still see a premium increase associated with HIT in their 2020 plan renewals.

The ACA (via IRC Section 4191) imposed a tax on certain medical devices. This 2.3% tax began in 2013, followed by a 2 year moratorium for 2016 and 2017, which was then extended in mid January 2018, to last through the end of 2019. The spending bill will permanently remove this tax. Though this more directly affects manufacturers, the trickle down impact will benefit consumers as well.

Many states have implemented their own prohibitions on the ability of out of network providers to bill patients for their services under certain circumstances, such as emergency medical care, and when patients have selected an in-network facility for treatment. Though HR 861 (which contained provisions to ban this type of medical billing to patients) was introduced in the House last January, and then given more attention again in November, it was noticeably absent in the final legislative bills.