The Alliance to Fight the 40 has sent a letter to members of Congress urging them to recognize the negative impact of the so-called “Cadillac” tax on the working families with whom they are meeting during the August recess. The letter describes the serious consequences of the tax and includes an addendum with links to numerous studies supporting those concerns.
The Alliance to Fight the 40 is a broad-based coalition comprised of public- and private-sector employer organizations, unions, health care companies, businesses and other stakeholders that support employer-sponsored health coverage. The Big “I” joined earlier this year in support of its mission to repeal the 40% tax on employee health benefits to ensure that employer-sponsored coverage remains an effective and affordable option for working Americans and their families.
Starting in 2018, the ACA will impose a 40% tax on health benefits that exceed an established annual cost. That year, the portion of health plans exceeding $10,200 a year in value for individuals or $27,500 a year for families will be subject to this 40% tax. This tax will impact a greater number of individuals each year as health care costs continue to rise.
According to a March survey by benefits consulting firm Mercer, about one-third of employers will face the tax in 2018 if they do nothing to change their plans. By 2022, almost 60% will face the levy. The Alliance to Fight the 40 predicts that this will lead to a reduction in employer-sponsored coverage and an increase in employee cost sharing—the exact opposite of the ACA’s stated goals. This tax will be harmful to middle-income Americans across the country.
In Congress, two pieces of pending legislation in the House attempt to repeal this tax provision. Rep. Frank Guinta (R-New Hampshire) introduced H.R. 879, the “Ax the Tax on Middle Class Americans Health Plans Act of 2015,” and Rep. Joe Courtney (D-Connecticut) introduced H.R. 2050, the “Middle Class Health Benefits Tax Repeal Act of 2015.” The Big “I” supports both efforts and looks forward to continuing to work with the Alliance to Fight the 40 to repeal this damaging tax.
Wyatt Stewart is Big “I” director of federal government affairs.
