Health Reform WK-EDGE House bill would extend Cadillac tax delay
Friday, September 21, 2018

House bill would extend Cadillac tax delay

By Lauren Bikoff, MLS

On September 12, the House Rules Committee examined the Save American Workers Act of 2018 (H.R. 3798) to prepare the bill for a floor vote. The employer-focused health care package would provide relief from certain Patient Protection and Affordable Care Act (ACA) taxes and the employer mandate. The legislation, which is expected to pass the House on a largely partisan vote, is unlikely to be taken up in the Senate this fall, although reports note that certain provisions of the bill could make their way into a larger, year-end Senate package.

Specifically, H.R. 3798 would delay the excise tax on employer-sponsored plans (also known as the Cadillac tax) under ACA section 9001 an additional year to 2023. The bill would revise the definition of "full-time employee" in regards to the ACA’s employer mandate, increasing the amount of weekly working hours for applicable employees from 30 to 40. The bill also would suspend the ACA’s employer mandate retroactively for years 2015-2019.

A September 11 report from the Congressional Budget Office (CBO) found that H.R. 3798 would cost the government $51.6 billion over the next decade. Delaying the employer mandate penalty is estimated to account for $25.9 billion through 2028. The change to the definition of "full-time employee" would cost $9.8 billion from 2019 through 2028. Finally, the delay to the implementation of the Cadillac tax would cost $15.5 billion, according to the CBO.

Several groups, such as the U.S. Chamber of Commerce and the ERISA Industry Committee (ERIC), have expressed support for H.R. 3798. "H.R. 3798 is a step in the right direction to fully repeal the Cadillac tax. As the tax looms closer to implementation, employers will be forced to ready themselves for it. To prepare, they will start scaling back benefits and increasingly shift rising health care costs to employees," said James Gelfand, senior vice president of health policy at ERIC.

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