President Donald Trump signed into law H.R. 195 on Monday evening, shortly after the House voted 266-150 and the Senate voted 81-18. The legislation ended a government shutdown that began on Saturday by providing for a short-term funding extension for the federal government through February 8. It also addressed several of NAHU’s priority legislative issues: delaying the Cadillac/Excise Tax until 2022, implementing a moratorium of the Health Insurance Tax (HIT), and funding the Children’s Health Insurance Program (CHIP) for another six years. The package additionally implements a two-year delay of the Medical Device Tax.
NAHU has been a leading advocate for these delays and has made permanent repeals of the taxes a priority, impressing upon Congress the urgency as employers begin adjusting plans in preparation of the taxes taking effect. NAHU released a one-page document demonstrating the timeline that employers undergo in preparation for major plan changes that are required by the Cadillac Tax, and submitted a letter to congressional leadership last week urging them to advance the legislation with the delays. We also urged the passage of H.R. 4616, H.R. 4620 and H.R. 4619, which provided for a one-year delay of the Cadillac Tax (from 2020 to 2021), three years of retroactive (2015-17) and one-year of prospective relief (2018) from the employer mandate penalties, temporary moratorium of the HIT for 2018 in the individual and small-group market by issuing rebates, and fully delay the tax across all markets for 2019.
NAHU was also pleased with the inclusion of funding for CHIP, which lapsed at the end of September and was last reauthorized in 2015 as part of Medicare payment reform that repealed the sustainable growth rate (SGR) formula. The new reauthorization provides funding through fiscal year 2023 and is largely self-funding, according to a report released by the Congressional Budget Office that found that due to the elimination of the ACA’s individual mandate penalties, a 10-year reauthorization would actually save the federal government $6 billion from 2018 to 2027. This is because the government would not spend as much on subsidized marketplace coverage, as well as the reduced net federal costs for Medicaid and employment-based insurance.
With the delays of the Cadillac Tax and HIT in place, NAHU is continuing our push for Congress and the Administration to permanently repeal these taxes. Bipartisan legislation is pending in both the House and Senate that would repeal these taxes. For a full repeal of the Cadillac Tax, Senators Dean Heller (R-NV) and Martin Heinrich (D-NM) have sponsored S. 58, and Representatives Mike Kelly (R-PA) and Joe Courtney (D-CT) sponsored H.R. 173, which has the support of over half the House chamber. For a full repeal of the HIT, Representatives Kristi Noem (R-SD) and Kyrsten Sinema (D-AZ) sponsored H.R. 246; a Senate companion is forthcoming. NAHU has Operation Shouts available for both NAHU members and your employer clients to send to your legislators.
While the CR provided a temporary funding patch for the government, the issue remains unresolved as another government shutdown looms in February unless Congress is able to come to an agreement. Immigration remains the most significant issue of disagreement that could lead to another shutdown, as President Trump and congressional Democrats are again at odds over funding for the Mexican border wall and the Deferred Action for Childhood Arrivals (DACA) program that provides protection for children of undocumented immigrants. Although Republicans can pass legislation without the assistance of Democrats in the House, they would need at least 9 Democrats to cross the aisle in the Senate for cloture. The last package saw the defection of five Republican senators, in addition to Senator John McCain who was not present to vote, potentially raising the threshold needed to 15 Democrats for passage.