American Benefits Council advocates against cap on employer-sponsored coverage

In multiple letters to the White House, the American Benefits Council has warned against legislation that would tax employees’ health insurance.

“Lawmakers need to know that proposals to tax American workers’ health care would do more than just hurt employees’ wallets. It would also destabilize the strong employer-sponsored insurance system,” said American Benefits Council President James A. Klein.

The Council was one of 27 employer organizations that prepared a February 13 letter to President Trump, urging his administration to reject any efforts to replace the Patient Protection and Affordable Care Act (ACA) with a measure that would tax employees’ health care. “Taxing health benefits by capping the individual tax exclusion constitutes a tax increase that will drive up out-of-pocket costs for employees and their families, risking disruption to the stable, employer-based system, and threatening the benefits working families enjoy and want to keep,” the letter said.

In a separate letter to the Trump Administration, as a member of the Alliance to Fight the 40 | Don’t Tax My Health Care, a broad-based coalition of public and private employers, labor unions and patient advocates, the Council argued that the 40 percent Cadillac tax on employer-sponsored health coverage should be repealed immediately, and should not be replaced with a cap on the exclusion that has many of the same fundamental flaws.

“We understand that crafting a new health care reform bill is a challenging task, but some things are obvious: reform should not destabilize the successful employer-sponsored system, and it certainly should not do so by taxing employees on their valued coverage,” Klein said.


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