- The U.S. House of Representatives voted 419-6 Wednesday in support of a bill that would eliminate the Affordable Care Act's excise tax on the high cost of employer-sponsored healthcare coverage, known commonly as the "Cadillac tax."
- The Middle Class Health Benefits Tax Repeal Act, introduced by Rep. Joe Courtney, D-Conn., in January, now moves to the U.S. Senate.
- Lawmakers originally delayed implementation of the tax in 2018, moving its effective date to 2022 after it was delayed to 2020 once before. If allowed to take effect, the ACA component would tax those employer-sponsored plans worth more than an annual limit of $10,200 for "self-only" coverage, i.e. individual coverage, and $27,500 for other types of coverage that are not self-only.
The push to repeal the Cadillac tax is one of the few areas of healthcare reform on which Republicans and Democrats in Congress share wide agreement. Lawmakers, employers and lobbyists alike have criticized the tax for being administratively difficult to implement and time-consuming, as well as potentially being an incentive for employers to offer fewer health benefits.
"The House action to repeal the Cadillac tax is welcome news for both employers and employees," Brian Marcotte, president and CEO of the National Business Group on Health, told HR Dive in an emailed statement. "It's been our steadfast position that Congress should eliminate the excise tax. Any tax that raises the cost of health benefits will harm the millions of working Americans and their families who rely on and value employer-sponsored health coverage."
Still, others previously told HR Dive that the tax was intended to serve the purpose of funding some aspects of the ACA. The lack of an alternative revenue stream may prove difficult to find, yet Republican lawmakers did attempt to do so in the since-defeated American Health Care Act. That bill floated a cap on the tax break for the 90th percentile of employer-sponsored health insurance plan premiums.