By Lauren Bikoff, MLS
Repeal of the Cadillac tax has been a popular legislative topic, even as the implementation of the tax has been delayed several times.
On January 24, Reps. Joe Courtney (D-Conn) and Mike Kelly (R-Pa) reintroduced H.R. 748, the Middle Class Health Benefits Tax Repeal Act, which would repeal the excise tax on high-cost health care plans, otherwise known as the "Cadillac tax." Repeal of the Cadillac tax has broad bipartisan support in Congress, the legislators noted. In the previous Congressional session, over 300 members in the House of Representatives cosponsored repeal legislation.
The Patient Protection and Affordable Care Act (ACA) requires plan sponsors and insurers to pay a 40 percent excise tax on the excess cost of employer-sponsored health coverage for employees—amounts over $11,100 for employee-only and $29,750 for family coverage, adjusted for inflation annually. The tax has been delayed several times, most recently to 2022.
"The American people have made it clear that they want Congress to address the rising cost of health care. Out of pocket costs are unaffordable for growing numbers of families, even those who have insurance. If the 40 percent excise tax goes into effect, we know this affordability crisis will dramatically worsen," said Courtney. "Actuarial experts have repeatedly warned that this tax will disproportionately and unfairly impact older workers, women, and working families in expensive geographic areas."
The legislation is supported by several organizations, including the American Benefits Council and the AFL-CIO. "Employers provide health coverage to more than 180 million Americans. We applaud the strong bipartisan support to repeal the Cadillac tax and commend Congressman Joe Courtney for sounding the alarm—even before the tax was enacted—about the burden it will place on working families and employers," said James A. Klein, American Benefits Council president. "The tax hits plans that are not ‘overly generous’ but, rather, are expensive for reasons beyond the control of employers and families who need coverage to protect themselves from financial ruin."
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