This week, Sens. Mike Rounds (R-South Dakota) and Martin Heinrich (D-New Mexico) introduced bipartisan legislation to repeal the “Cadillac” tax. Earlier this year, Reps. Joe Courtney (D-Connecticut) and Mike Kelly (R-Pennsylvania) introduced similar legislation to repeal the “Cadillac” tax, which at press time already has 224 bipartisan cosponsors.
Starting in 2022, this Affordable Care Act (ACA) tax would impose a 40% tax on health benefits that exceed an established annual cost. In response to the latest repeal legislation, the Big “I” joined nearly 600 groups in sending a letter to Congress asking for a repeal of the “Cadillac” tax.
Congress has acknowledged the problems with the “Cadillac” tax by delaying the implementation date numerous times over the years. While the “Cadillac” tax was intended to target only high-value plans, more modest plans are projected to trigger the tax due to the health care costs of the workers and families covered by the plans.
The tax would unfairly and disproportionately affect middle-income Americans, women, seniors and working families. Moreover, the tax would penalize small businesses, as they would potentially be forced to choose between paying the tax or reducing benefits for their employees. The tax would do irreparable damage to the employer-sponsored health care system for the 181 million Americans who depend on it.
The Big “I” will continue to work with the Trump Administration and leaders in Congress to ensure this tax never sees the light of day.
Wyatt Stewart is Big “I” senior director of federal government affairs.