More than 50 groups urge Senate to preserve employer-sponsored health benefits

More than 50 business organizations sent a letter to Senate Majority Leader Mitch McConnell (R-Ky) and Democratic Leader Chuck Schumer (D-NY) urging them to protect the employer-sponsored health insurance system by repealing Patient Protection and Affordable Care Act (ACA)-created taxes and preserving improvements to consumer-driven health options proposed in the House-passed American Health Care Act (AHCA).

The groups include the Employers Council on Flexible Compensation; the HR Policy Association; the Society for Human Resource Management; The ERISA Industry Committee; and the U.S. Chamber of Commerce.

ACA taxes.

The letter advocated for the full repeal the 40 percent “Cadillac” excise tax on employer-sponsored health insurance, and to consider other AHCA provisions, including repealing ACA taxes on fully-insured health insurance plans, branded pharmaceutical products, and medical devices.

The letter stated, “Protecting employer-sponsored health benefits by repealing the ‘Cadillac Tax’ and not imposing new taxes on the health benefits of working families is critical to the viability of this country’s health care system.”


The organizations also asked the Senate to preserve changes the AHCA would make to health savings accounts (HSAs) that would help plan beneficiaries, including: linking the annual HSA contribution limit to the maximum out-of-pocket limit, fixing the HSA catch-up contribution glitch, creating a grace period in between HSA-qualified plan enrollment and establishment of an HSA, eliminating the cap on flexible spending arrangements (FSAs), and allowing the use of tax-preferred health accounts to purchase over-the-counter medications without a prescription.

The letter laid out several proposals for the Senate to consider when crafting their health care bill, including:

  • Ensure that an HSA-qualified health plan can offer first-dollar coverage, or waive beneficiary costs, for products and services likely to prevent catastrophic costs later;
  • Completely separate excepted benefits (like telehealth and onsite medical clinics) from HSA-contribution eligibility; and
  • Streamline rules for rollovers from other accounts to HSAs, while simplifying rules relating to which dependents’ costs can be covered from the primary insured’s HSA.

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