On August 16, President Biden signed the Inflation Reduction Act into law, just days after the Senate approved it by a vote of 51 to 50, with Vice President Kamala Harris casting the tie-breaking vote, and the House approved it by a vote of 220 to 207. The legislation includes a 15% corporate alternative minimum tax, an excise tax on stock buybacks, authorization for the Department of Health and Human Services (HHS) to negotiate certain prescription drug prices for Medicare beneficiaries, an insulin safe harbor for health savings account (HSA)-qualifying high-deductible health plans (HDHPs), changes to the Medicare Part D benefit and other provisions.
The legislation’s key provisions are discussed below and will take effect over several years, beginning in 2023. The corporate alternative minimum tax, excise tax on stock options and insulin safe harbor for HDHPs will take effect in 2023.
Employers should review the retirement and healthcare-related provisions of the Inflation Reduction Act and take appropriate action based on their individual plan provisions.