Key Issues

House Passes Repeal of the Cadillac Tax and the Nonprofit Benefits Tax

December 18, 2019 (WASHINGTON INSIDER ALERT) - On December 17, 2019, the U.S. House of Representatives passed a pair of bipartisan spending packages to fund the federal government for the remaining nine months in fiscal year 2020. The deal, which avoids a repeat of last year’s government shutdown, also includes substantial policy changes that CUPA-HR has been advocating for many years.

Cadillac Tax Repeal

Included in this package is a full repeal of the 40 percent "Cadillac tax" on employer-sponsored health care coverage. CUPA-HR has been advocating for repeal of this tax since it was first mandated by the Affordable Care Act. The tax, which has been repeatedly delayed, was set to go into effect in 2022 and would have impacted employer-sponsored health coverage exceeding certain benefit thresholds. CUPA-HR has been a member of the Alliance to Fight the 40 — a coalition dedicated to repealing the tax — and signed on to a letter to Congress asking that repeal be included in any year-end spending package.

Repeal of Unrelated Business Income Tax (UBIT) on Nonprofit Qualified Parking and Transportation Fringe Benefits

In addition to the repeal of the Cadillac tax, Congressional leaders also struck a deal on a last-minute tax package. That deal, which was added to the larger spending bill funding the government, will rescind a controversial tax created as part of the Tax Cuts and Jobs Act, which imposed a new tax on fringe benefits that churches and other nonprofits provide their employees. CUPA-HR has been a member of the UBIT coalition advocating for repeal of this provision and signed on to a November 13 letter with 115 other employer groups calling on Congress to include repeal in any mechanism used to fund the federal government.

It is widely expected that the Senate will pass the legislation and President Donald Trump will sign it into law before government funding expires on Friday.