More companies pledge to fight the Cadillac tax

American Airlines and WestRock have joined the Alliance to Fight the 40, a coalition seeking to repeal the Patient Protection and Affordable Care Act (ACA)-created 40 percent excise tax on employer-sponsored health plans. American Airlines and WestRock directly sponsor health plans or advocate on behalf of tens of millions of Americans with employer-sponsored coverage.

Cadillac tax. The ACA created the Cadillac tax to act as a revenue offset provision to help pay for the cost of the law. Beginning in 2020, 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.

The Alliance to Fight the 40. The coalition is comprised of public and private sector employer organizations, patient advocates, unions, health care companies, businesses and other stakeholders that support employer-sponsored health coverage.

“Because American businesses are profoundly committed to the employer-sponsored system, they are deeply concerned about the so-called ‘Cadillac Tax’s’ devastating effects. It will not just hit ‘overly-generous’ health plans. It will penalize plans that are expensive because they cover large percentages of women, older and disabled workers or families struggling with chronic health conditions or catastrophic health events,” said James A. Klein, president of the American Benefits Council.

“The Alliance to Fight the 40 is committed to full repeal of the ‘Cadillac Tax’ as soon as possible, and we are proud to welcome American Airlines and WestRock to the growing list of private employers, public employers, patient advocates, and labor groups joining us to advocate for repeal,” Klein concluded.


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