Employer Association Urges House To Pass Act To Ax Cadillac Tax

A piece of legislation that would repeal the 40 percent Cadillac tax is receiving support from the HR Policy Association (HR Policy), which represents chief human resource officers of over 360 large U.S. corporations. The Ax the Tax on Middle Class Americans’ Health Plans Act (H.R. 879) was introduced February 11, 2015, and HR Policy sent a letter to Congress urging its passage.

Tax imposed in 2018. Under the Patient Protection and Affordable Care Act (ACA), the Cadillac tax will impose a nondeductible 40 percent excise tax on high cost health plans, beginning in 2018. The threshold amounts for the imposition of the tax are $10,200 for individual coverage and $27,500 for family coverage. The tax is applied to the amount of an employee’s benefit that exceeds the threshold.

Despite the fact that these amounts will be adjusted for inflation, HR Policy contended in a recently-issued press release that continued medical inflation, an aging workforce, new advances in medical technology, and the ACA’s benefit mandates will combine to make affordable health care difficult for employers to provide, and will eventually cause “Chevrolet” benefit plans to be taxed as “Cadillac” plans. The burden of the excise tax will eventually fall on American employees and their families, HR Policy says.

Changes already made. HR Policy President and General Counsel Daniel V. Yager stated in the letter to Congress that, already, according to a recent survey, “78 percent of employers changed their health care plans for 2015 in response to the excise tax. With that urgency in mind, we believe it is important that the House pass the legislation this year, rather than wait until just before the effective date of the excise tax.”

For more information, visit http://www.hrpolicy.org/downloads/2015/15-23_PR_Ax_Tax_Act.pdf.

Visit our News Library to read more news stories.