House Passes Cadillac Tax Repeal 419-6

A major priority of PIA.
House Passes Cadillac Tax Repeal 419-6
July 23, 2019

By an overwhelming vote of 419-6, the U.S. House voted to repeal the provision of the Affordable Care Act (ACA) known as the “Cadillac Tax.” Repeal of the 40 percent excise tax on so-called “overly generous” employer-sponsored health plans is a major priority of PIA.

The Middle-Class Health Benefits Tax Repeal Act (H.R. 748), sponsored by Reps. Joe Courtney (D-CT) and Mike Kelly (R-PA), achieved almost-unprecedented bipartisan support.

“Millions of Americans rely on employer-sponsored health care,” said Jon Gentile, PIA National vice president of government relations. “PIA National thanks the House for repealing this tax that will, if it is implemented, negatively affect millions of people.”

Enacted as a part of the Affordable Care Act (ACA), the Cadillac Tax has never been implemented, due in large part to advocacy by PIA members who led successful efforts to delay it until 2022. Because the Cadillac Tax is indexed to chained consumer price index (CPI), 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.

READ: “Cadillac Tax”: Robin Hood As a Model for Healthcare Reform (PIA Connection 8/2013)

“PIA National has long sought to prevent this tax from ever being implemented, and we’ve successfully advocated for its delay twice,” Gentile said. “Even though the tax will not take effect until 2022, its very existence creates instability in the health insurance market while putting consumers’ healthcare at risk. We urge the Senate to follow the House and pass this bill to fully repeal the Cadillac Tax as soon as possible.”

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