Shelby Livingston December
05, 2019
More than 1,000
employers, insurers, unions, and other organizations on Thursday urged Senate
leaders to scrap a controversial tax on expensive employer-sponsored health
plans that's set to go into effect in 2022.
In a letter to Senate
Majority Leader Mitch McConnell and Minority Leader Chuck Schumer, the
organizations warned that the failure to repeal the so-called "Cadillac
tax" on certain employer plans would lead workers to pay more for medical
treatment and face narrower provider networks. Already, they wrote, employers
are altering their benefit plan packages to avoid the tax.
"We are
asking you to swiftly, and fully, repeal the impending 40% tax on
employer-provided health care before this onerous tax increase hits the
pocketbooks of hardworking Americans," the letter states.
Businesses and
insurers have long fought to get rid of the Affordable Care
Act's Cadillac tax, which would impose a 40% excise tax on
employer-provided health benefits that exceed certain thresholds. Congress has
delayed its implementation twice, so it has never gone into effect, but
employers argue that they still have to cut benefits to avoid hitting the
threshold in case it does go into effect.
Employers argue
that the tax, while meant to target overly generous, high-cost plans, will
eventually hit all employer health plans because of the way it is structured.
About 178 million people get health coverage through their employers.
According to the
National Business Group on Health's most recent survey or large employers, 73%
of employers would have at least one health plan that triggers the tax in 2022
and 94% would in 2026.
"Even though
the tax isn't scheduled to take effect until 2022, employers will begin
developing their health care plans and strategies for 2022 next year and the
existence of the excise tax will have significant implications for employers
and employees," Brian Marcotte, president and CEO of the National Business
Group on Health said in a statement.
The U.S. House of
Representatives in July voted 419-6 to repeal the tax,
even though full repeal would come with a nearly $200 billion price tag. It is
unclear if the Senate will act. A companion bill introduced in the Senate in
March has collected 63 cosponsors.
A spokesman for
Senate Finance Committee Chair Chuck Grassley (R-Iowa) said the senator is open
to considering a full repeal of the Cadillac tax, but said "the more
urgent matter is reaching a deal on the more than three dozen tax provisions
that expired between the end of 2017 and this year, and a number of
clarifications to the tax reform bill."
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