Insurers, pharmacy companies, unions join forces to kill Cadillac tax

As part of a broad effort to repeal a section of the Patient Protection and Affordable Care Act (ACA), a coalition of pharmaceutical companies, insurance plans and unions filed a Lobbying Registration with Congress for a new organization called the Alliance to Fight the Forty. The group describes itself as an “alliance of companies seeking repeal of the 40 [percent] excise tax on health plans,” referring to the ACA’s excise tax on high cost employer-sponsored health coverage, also known as the “Cadillac tax.”

Cadillac tax. Section 9001 of the ACA created the Cadillac tax as a revenue offset provision to help pay for the cost of the law. Starting in 2018, a non-deductible excise tax will be imposed on the value (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. For both fully-insured and self-funded plans, employers will be responsible for calculating, for each tax period, 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, though some employers are thinking about charging the tax back to plan participants.

Opposition. There is a growing movement of opposition to the Cadillac tax, focusing on repealing section 9001. Entering the fray is the newly formed Alliance to Fight the Forty, which includes more than a dozen pharmaceutical companies, insurance plans, and unions. According to the lobbying registration, the affiliated organizations include New York Life Insurance Company, The Council of Insurance Agents and Brokers, Pfizer Inc., Independent Insurance Agents and Brokers of America, National Association of Health Underwriters, Blue Cross Blue Shield Association, Cigna Corporation, Corporate Health Care Coalition, Laborers International Union of N.A., and American Benefits Council.

According to The Hill, the Obama Administration will veto any changes to the ACA that do not strengthen the law, which includes repeal of the Cadillac tax without any new revenue-raising provisions to replace it.


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