On Monday, Senators Dean Heller (R-NV) and Martin Heinrich (D-NM) introduced S. 58, and last week Representatives Mike Kelly (R-PA) and Joe Courtney (D-CT) introduced H.R. 173, legislation to repeal the ACA’s Cadillac/excise tax, which will impose a 40% excise tax on health plans that exceed certain cost thresholds beginning in 2020. The re-introduction of these bills will help as legislators consider which parts of the ACA that they will be including in the forthcoming repeal of the health reform law. Republicans only have enough votes in the Senate to use the budget-reconciliation process to repeal tax- and spending-related parts of the law and will be limited in what they are able to repeal. NAHU is calling on Congress to include a repeal of the Cadillac/excise tax in its reconciliation efforts.On Tuesday, NAHU sent an all-member Operation Shout encouraging everyone to contact their member of Congress to support these bills. If you have not taken action, please do so today.
The Cadillac tax calls for a 40% excise tax on the amount of the aggregate monthly premium of each primary insured individual that exceeds the year’s applicable dollar limit, which will be adjusted annually to the Consumer Price Index plus one percent initially and then CPI. Given that the pace of medical inflation is well beyond that of general inflation, the tax is destined to outgrow itself in short order and many employers will be impacted by the cost of the tax and the enormous compliance burden that the tax creates. Mercer estimated that a third of employers will be subjected to the tax when it’s set to kick in and that 60% of employers will be hit by 2022. Because of the projected wide-reaching effect of the tax, many employers may be deterred from offering coverage.
You can help us spread the message by:
1. Contacting your senators and representative. Send an Operation Shout today asking your federal legislators to repeal the Cadillac/excise tax. You can take action here.
2. Telling your employer clients to take action. Your employer clients that will be directly impacted by the tax can send the most direct message of why this repeal is needed. Tell them to take action here.
3. Sharing your story. As a licensed insurance specialist who works closely with employers to help them understand and comply with the law's requirements, stories from your clients about how they will be impacted by the tax, such as through decreased access to coverage, increased cost-sharing and out-of-pockets costs, and added administrative burdens for compliance, will demonstrate the widespread need for this repeal. We will share your stories with appropriate legislators and staff. You can share your story here.
In addition to the Cadillac tax, NAHU is continuing to advocate a full repeal of the Health Insurance Tax (HIT). Last week, Representatives Kristi Noem (R-SD) and Kyrsten Sinema (D-AZ) introduced H.R. 246, along with 81 co-sponsors. This legislation would permanently repeal the tax, dubbed a fee, which is charged to insurers to help pay for the ACA but is ultimately passed down to employers, employees and individuals, raising the cost of their plans. The HIT was previously delayed under a one-year moratorium for 2017, as the tax had already gone into effect.