U.S. Rep. Mike Kelly (R-PA) last week led 40 other members in introducing bipartisan legislation to repeal the so-called Cadillac Tax on high-cost employer-provided health insurance plans.
The Affordable Care Act’s high-cost plan tax (HCPT), known as the Cadillac Tax, is a 40-percent excise tax on employer plans exceeding $11,100 in premiums per year for individuals and $29,750 for families, according to the Commonwealth Fund, a nonprofit private foundation supporting independent research on health policy reform. The tax is scheduled to take effect in 2020.
“By taxing the benefits that employers generously offer their employees to help keep them healthy and financially secure, the Cadillac Tax needlessly cuts into ever-tightening family budgets while making health care less accessible,” said Rep. Kelly.
H.R. 748, sponsored on Jan. 24 by U.S. Rep. Joe Courtney (D-CT), would repeal the tax. Rep. Kelly is the lead original cosponsor of the proposal and has been joined by additional cosponsors including U.S. Reps. Brian Fitzpatrick (R-PA), Rodney Davis (R-IL), Ken Calvert (R-CA) and Elise Stefanik (R-NY).
“The American people have made it clear that they want Congress to address the rising cost of health care,” said Rep. Courtney. “Out of pocket costs are unaffordable for growing numbers of families, even those who have insurance. If the 40 percent excise tax goes into effect, we know this affordability crisis will dramatically worsen. Actuarial experts have repeatedly warned that this tax will disproportionately and unfairly impact older workers, women and working families in expensive geographic areas.”
“As we know it, the employer-sponsored health care system is stable, efficient and effective in covering more than half of all Americans. Employers are on the cutting edge of innovation, leveraging new technologies and systems to reduce health care costs and produce better outcomes,” Rep. Kelly said. “The Cadillac Tax threatens this time-tested system as it would lead many employers to forgo investments in the health care solutions of tomorrow.”
The lawmaker added that, “Now is the time to fully and permanently repeal the Cadillac Tax.”
H.R. 748 has support from a range of stakeholders, patient groups, employers, and labor organizations, including the American Benefits Council and AFL-CIO.
“The tax hits plans that are not ’overly generous’ but, rather, are expensive for reasons beyond the control of employers and families who need coverage to protect themselves from financial ruin,” said James Klein, president of American Benefits Council, who noted that employers provide health coverage to more than 180 million Americans.
“We applaud the strong bipartisan support to repeal the Cadillac Tax,” he added.
AFL-CIO President Richard Trumka said, “It’s a shame that health care remains out of reach for millions across the country because they can’t afford to see their doctor.” He said it’s time to end a tax that “drives up deductibles and copays that empty workers’ wallets.”
During the 115th Congress, Rep. Kelly sponsored the bipartisan Middle Class Health Benefits Tax Repeal Act of 2017, H.R. 173, which garnered 304 cosponsors who also sought to end the Cadillac Tax. The U.S. House Ways and Means Committee sent the measure to its health subcommittee for review.
The newly reintroduced H.R. 748 also has been referred for consideration to the House Ways and Means Committee.