ERIC reiterates stance against Cadillac tax in letter to Senators

The ERISA Industry Committee (ERIC) has submitted a letter to the Senate reiterating its stance against the Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) excise tax on high-cost health plans. ERIC has asked the Senate for support in repealing the Cadillac tax.

Cadillac tax. Section 9001 of the ACA created the Cadillac tax to act as a revenue offset provision to help pay for the cost of the law. Beginning in 2018, a non-deductible excise tax will be imposed on the cost of employer-sponsored health programs that exceed an aggregate value of $10,200 for individual employee-only coverage and $27,500 for family coverage. Each tax period, employers will be responsible for calculating the amount of excess benefit subject to the tax for any applicable employer-sponsored coverage offered to employees. The excise tax must be paid by the employer.

Excise tax will limit ERIC members. According to Annette Guarisco Fildes, president and CEO of ERIC, “The 40 percent excise tax does nothing to reach its purported goal of bringing down the cost of health care. The addition of the tax on top of the already rising costs of health care would actually limit the ability of ERIC members to continue offering high-quality, cost-efficient health care benefits. If employers are forced to limit their health benefits in order to avoid the tax, it could be detrimental to the health of millions of employees and their families. At a time when we should be supporting the middle class, these new burdens will have nothing but damaging effects.”

The letter notes that ERIC also supports repeal of the ACA’s employer mandate and related reporting requirements. ERIC believes that these provisions generate an “extraordinary burden for employer group health plans without any corresponding benefit, while sowing confusion and uncertainty among employees.”


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