TO THE MEMBERS OF THE U.S. HOUSE OF REPRESENTATIVES:
The U.S. Chamber of Commerce strongly supports H.R. 748, the “Middle Class Health Benefits Tax Repeal Act of 2019.” This legislation would permanently repeal the “Cadillac Tax,” a 40 percent excise tax on robust employer-provided health plans. The Chamber will consider including votes on H.R. 748 in our annual How They Voted scorecard.
The Cadillac Tax strikes at the foundation of employer-sponsored health insurance by levying a 40 percent excise tax on group health plans above approximately $11,200 for individual coverage and $30,100 for family plans in 2022, when it is scheduled to go into effect. A Kaiser Family Foundation analysis released on July 12, 2019 found that nearly one in three (31 percent) employers offering employee health benefits would trigger the tax in 2022, and nearly half (46 percent) would do so by 2030, when including the voluntary employee Flexible Spending Account (FSA) contributions.
Understandably, employers wish to avoid this onerous and unwise tax, and have begun taking painful steps to avoid triggering it, including reducing health benefits and raising employee premiums, deductibles, and co-pays. Since the Cadillac Tax first threatened employee health benefits nine years ago, employee premiums and deductibles have increased dramatically for many of the 181 million Americans who depend on health coverage from their employer.
At a time when millions of Americans are struggling to afford health care coverage, the looming Cadillac Tax is only exacerbating the problem by taxing high-value health benefits. The Chamber urges the House to permanently repeal the Cadillac Tax and pass H.R. 748.
Suzanne P. Clark
U.S. Chamber of Commerce