Jul 17, 2019
The House of Representatives voted 419-6 to pass H.R. 748, a bill to fully repeal the ACA's Cadillac Excise Tax. It will next be considered by the Senate, where a companion bill, S. 684, has 42 bipartisan co-sponsors. NAHU and the Alliance to Fight the 40 have long called for fully repealing the tax, and urge the Senate to quickly advance this legislation to the President.
If not fully repealed, the Cadillac Tax would impose a 40% excise tax on the amount of the aggregate monthly premium of each primary insured individual that exceeds the year's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. The tax would affect a majority of plans, including those that aren't benefit-rich and were not the intended targets of this provision. Many employers may be deterred from offering coverage, including HSA-compatible plans, wellness programs, or onsite clinics.
Originally set to take effect on January 2018, the tax was twice delayed after the enactment of NAHU-supported measures in 2015 and 2018. A full repeal is needed to prevent additional cost-shifting onto employees or the cancellation of group coverage altogether. Looming proposed rules and continued delays affect plan decisions that are being made now for the next several coverage years.
