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Onslaught of Bills to Repeal Cadillac Tax Continues
Pension & Benefits Daily™ covers all major legislative, regulatory, legal, and industry developments in the area of employee benefits every business day, focusing on actions by Congress,...
Sept. 24 — Congress continued its efforts to repeal the Affordable Care Act's 40 percent excise tax on high-cost health plans with new Senate legislation that would nix the levy.
The American Worker Health Care Tax Relief Act of 2015 (no bill number available), introduced Sept. 24 by Sen. Sherrod Brown (D-Ohio), joins several other bills that have been introduced this year by both Democrats and Republicans to fully repeal the unpopular tax that many call the Cadillac tax. Brown's bill has nine co-sponsors, including Democratic presidential candidate Sen. Bernie Sanders (I-Vt.).
“Some have said that this tax only falls on ‘Cadillac’ health care plans, but the reality is that the plans this bill will tax are more like Chevrolets,” Sanders said in a statement about the bill. “Workers have fought hard to negotiate decent healthcare benefits, often in exchange for lower pay. This excise tax unfairly punishes them. It has got to be replaced.”
Starting in 2018, the tax imposes a 40 percent excise tax on health plans that cost more than $10,200 per year for individuals and $27,500 per year for families—thresholds indexed after that year to inflation.
Brown's bill comes on the heels of another one to repeal the tax. Introduced by Sens. Dean Heller (R-Nev.) and Martin Heinrich (D-N.M.), the Middle Class Health Benefits Tax Repeal Act (S. 2045) has 14 co-sponsors, including Senate Finance Committee Chairman Orrin G. Hatch (R-Utah).
Two repeal bills were introduced earlier this year in the House, by Rep. Joe Courtney (D-Conn.) (H.R. 2050) and Rep. Frank Guinta (R-N.H.) (H.R. 879), and they have garnered over 220 House co-sponsors.
Brown said in a statement on his legislation that by “repealing the Cadillac tax, we can prevent certain employer-provided health plans from being taxed. But we shouldn’t end one tax on middle class taxpayers while leaving them to foot the bill for an increase in the federal deficit.”
The bill includes an acknowledgement that repealing the tax requires an offset to make up the revenue that would be lost by a repeal, but doesn't offer one.
Hatch said of the bill he's signed on to that it doesn't need budget offsets.
To contact the reporter on this story: Kristen Ricaurte Knebel in Washington at kknebel@bna.com
To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com
Text of Sen. Brown's bill is at http://src.bna.com/mZ.