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Congress Reexamines Repeal of Cadillac Tax
Four members of Congress have reintroduced bipartisan legislation that would amend the Internal Revenue Code of 1986 to repeal the excise tax on high-cost employer-sponsored health coverage.
U.S. Sens. Dean Heller, R-Nev., and Martin Heinrich, D-N.M., and Reps. Mike Kelly, R-Pa., and Joe Courtney, D-Ct., sponsored the “Middle Class Health Benefits Tax Repeal Act” (S. 58 and H.R. 173) that would repeal the “Cadillac Tax.” This tax would impose a 40 percent excise tax on health plans that exceed certain cost thresholds ($10,200 for employee-only and $27,500 for family coverage) beginning in 2018.
“When the law was created, it was marketed as a tax on the richest benefit plans, but that is not the case,” the National Association of Health Underwriters CEO Janet Trautwein said in a statement. “Not only does it not actually identify plans with ‘Cadillac’-type benefits, but it’s structured in such a way that many employers, from the smallest employer to the largest corporation, may have to reconsider their ability to offer coverage to employees at all.”
The tax will weigh heavily on most American businesses that can’t afford it and must make severe cuts to stay above water, Trautwein said. Many of these employers, even after reducing benefits and premiums, will still not be able to lower their annual costs under the Cadillac-tax thresholds.
“The Cadillac tax hits especially hard those employers with an aging workforce, those with high claims and those in areas with high medical care costs,” she said. “We look forward to working with members of Congress on this important bipartisan effort to repeal this inequitable tax and protect employer-sponsored health coverage.”
The National Association of Health Underwriters, headquartered in Washington, D.C., represents 100,000 professional health insurance agents and brokers who provide insurance for millions of Americans.
For more information about the Cadillac Tax, please contact us.
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In this issue:
This Just In...
House Votes to Clear Way for Repeal of Obamacare
How Wellness Programs Improve the Bottom Line
Trends in Workplace Benefits in 2017
Congress Reexamines Repeal of Cadillac Tax
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