Support heats up for Cadillac tax repeal

Support heats up for Cadillac tax repeal

Commentary: I’ve learned a lot in recent months about the importance of civic responsibility. A vacant church property in my largely residential neighborhood has been sold to a private developer who is determined to tear down the church building and erect in its place a six-story housing development for college students. Community members have rallied, launching letter-writing campaigns, meeting with city officials and spending countless hours learning the intricacies of sound municipal planning so that they can oppose the development in a thoughtful manner. And when communities rally and make their voices heard, change is possible.

The employer community has certainly made its voice clear on the Affordable Care Act’s excise tax. I’ve yet to hear from an employer who is supportive of the 40% tax, set to go into effect in 2018, on health plans exceeding $27,500 for a family or $10,200 for an individual. About one-third of employers are currently at risk for triggering the tax in 2018 if they make no changes to their most costly plan, according to consulting firm Mercer’s National Survey of Employer-Sponsored Health Plans. Research from the National Business Group on Health, meanwhile, reveals that nearly half of large employers say that if they don’t take measures to control costs now, at least one of their health plans will reach the threshold triggers for the Cadillac tax in 2018.

While the intended goal of the Cadillac tax is arguably to encourage employers to make more appropriate tradeoffs between wages and health insurance for their employees, it’s unlikely that employers will increase wages if they choose to drop health coverage for their workers.

Opposition to the tax has always been strong, but support for an outright appeal is growing. Last week, Senators Dean Heller (R-Nev.) and Martin Heinrich (D-N.M.) introduced legislation seeking to repeal the Cadillac tax and Rep. Joe Courtney (D-Conn.) has introduced similar legislation in the House. Legislators are joining a growing chorus of private and public employer groups, insurers and unions that have banded together in a broad-based coalition called the  Alliance to Fight the 40, which stands in favor of repealing the tax.

The American Benefits Council applauded the senators’ leadership in sponsoring the Middle Class Health Benefits Tax Repeal Act of 2015, as did WorldatWork, which called the tax a “significant threat” that will force companies to drastically alter their health benefits.

The ultimate fate of the Cadillac tax remains to be seen. But as James Klein, president of the American Benefits Council said, a repeal would be “a bipartisan, bicameral success story.” And when it comes to employer-sponsored health care, we need more success stories.