The health care reform ball is in the Senate’s court. Over the last few weeks, a working group has been hashing out a plan to repeal and replace Obamacare.
Since most Americans get their health coverage through work, employers are paying close attention to what is happening on Capitol Hill. One target they’re focusing on is permanently eliminating the “Cadillac Tax,” a 40% tax on so-called “high-cost” health plans. In an explainer on threats to employer-sponsored health plans earlier this year, I wrote:
This tax will force employers to offer less robust health coverage to employees and their families. The true irony is that the ACA also mandates that employer’s offer “minimum value” health coverage which could very well one day be deemed “too robust” and subject to the Cadillac tax.
In 2015 Congress delayed the tax until 2020, but it being less than three years away from going into effect, some employers have already made plans to avoid paying the tax.
In a letter, a group of 50 associations representing businesses and employers asked Senators to eliminate the Cadillac Tax as well as “avoid any actions that could destabilize the employer-sponsored health care system.”
Chief among the threats to employer-sponsored coverage are proposals to tax workers’ health coverage, whether by preserving the ACA’s 40 percent “Cadillac” tax, or imposing new taxes on employee health care benefits. Legislation that implements a tax on health benefits (“cap on the exclusion”) will result in a system that is worse than current law for workers and for employers, and failure to eliminate the Cadillac tax will raise coverage costs for American workers, their families and employers, and work against efforts to lower health care costs.
Protecting employer-sponsored health benefits by repealing the Cadillac Tax and not imposing new taxes on the health benefits of working families is critical to the viability of this country’s health care system.
The Cadillac Tax is one of a number of Obamacare taxes that must be repealed.
With more than 177 million people relying on health coverage from employers, Senators must ensure that reform leads to greater access to higher quality health care at a more affordable cost to families.