For the Win: The Latest Repeal Efforts Do Not Touch Employer Tax Exclusion

For the Win

On Monday, House Republicans released the latest version of the repeal and replace legislation. The proposed legislation does not include the cap on the tax exclusion for workers in employer-sponsored plans, which would have meant a payroll tax hike for tens of millions of Americans. We consider this a major victory…

…but still just the beginning of what is sure to be a fascinating couple of months.

This latest version of the repeal and replace legislation is being marked up in both the House Ways & Means and Energy & Commerce Committees at this very moment and could be voted on by the full House of Representatives as early as next week. This, of course, comes amid an uproar from some Republicans who want to expand the bill and others who dramatically want to scale it back.

In the meantime, we will redouble our efforts to persuade legislators on both sides of the Capitol to not undermine employer-based health plans, which serve more than 170 million Americans. “Do no harm” to employer plans remains our mantra.

Additional Resources:

• Click here for an interactive map released by Kaiser that compares county-level estimates of premium tax credits consumers would receive under the ACA in 2020 with what they would receive under the legislation proposed Monday night 6 House Republican leaders.
• Curious about the parts of the ACA that the Republican legislation would keep, change or discard? Click here for a chart from the New York Times.

Cadillac Tax Looms

The challenge to repeal the Cadillac Tax, however, continues. If the proposed legislation is passed as-is, the Cadillac Tax would be delayed to 2025. But delay is not enough. Workers will continue to lose benefits and face higher costs as long as the tax remains in law. We want full repeal.

The current Cadillac Tax threshold is $10,200 for an individual plan and $27,500 for families. Most predictions indicate that a significant number of group health plans would trigger the 40 percent excise tax by 2025 if there aren’t any adjustments made to the threshold.

There is promising news:

• Last year, more than 300 Members of Congress signed on to legislation to repeal the Cadillac Tax
• The Senate voted 90 to 10 to repeal the Cadillac Tax without an off-set in 2015

Messaging points:

• The Cadillac Tax disproportionately affects women, families, individuals with acute or health chronic conditions and people living higher–cost geographies
• Taxing the health care does not reduce healthcare costs; it makes it unaffordable for American workers and their families

Click here for our one-pager on the Cadillac Tax.

Next Steps

Stay tuned for a deeper analysis and more information as the situation evolves. In the meantime, please contact Joel Wood at joel.wood@ciab.com or Joel Kopperud at joel.kopperud@ciab.com with any questions.