The Higher Ed Workplace Blog

Fight to Repeal the Cadillac Tax Continues

Congress has acted twice to delay the 40 percent excise tax on high-value employer-provided healthcare coverage, known as the “Cadillac tax,” yet the latest effective date of 2022 looms.

The Cadillac tax was signed into law as part of the Affordable Care Act (ACA) and was originally scheduled to take effect in 2018, but was delayed until 2020, and then again to 2022. Since passage of the ACA, delays and even full repeal of the Cadillac tax have been supported by members of both political parties.

CUPA-HR has long been supportive of a full repeal of the tax and has joined efforts over the years to repeal and delay the provision from taking effect. In the latest effort, CUPA-HR joined a June 4 letter signed by 665 organizations including businesses, nonprofits, chambers of commerce, insurers, brokers, unions and patient advocacy groups urging the Senate to repeal the Cadillac tax and to co-sponsor S. 684, the Middle Class Health Benefits Tax Repeal Act of 2019.

The letter highlights 2018 Kaiser Family Foundation data that has found that since 2010, deductibles have risen 89 percent while wage growth has remained comparatively flat. The tax was intended to only hit the most expensive “gold-plated” healthcare plans, but the reality is that very modest plans that cover low- and middle-income Americans are expected to trigger the tax.

Over 300 representatives and 30 senators cosponsored repeal legislation last Congress, and we are hoping to see even greater bipartisan support this Congress that will finally remove the threat of this major tax.