The Middle-Class Health Benefits Tax Repeal Act (H.R. 748) was passed by the House on July 17 by a vote of 419-6. The bill, sponsored by Reps. Joe Courtney (D-CT) and Mike Kelly (R-PA), would repeal the provision of the Affordable Care Act (ACA) often referred to as the “Cadillac tax,” which would impose a 40 percent excise tax on so-called “overly generous,” employer-sponsored health plans. See PIA National’s press release here.
Enacted as a part of the ACA, the Cadillac Tax has never been implemented, due in large part to advocacy by PIA members, who led multiple successful efforts to delay it until 2022. The tax, which is assessed using the chained consumer price index (CPI), would apply to fully insured and self-funded employer health plans and will tax policies with limits that exceed the annual thresholds of $11,100 for individual coverage and $29,750 for family coverage. Over time, more and more employer-sponsored health plans will be affected, because the benefit thresholds will increase at a rate slower than that of inflation. This will subject an increasing number of Americans to the Cadillac Tax sooner, because inflation will outpace increases in the thresholds using chained CPI.
The repeal of the Cadillac tax has long been a priority for PIA National, and we urge the Senate to follow the House and pass this bill to fully repeal the Cadillac Tax as soon as possible.