HR Policy Calls on Congress to Repeal the ACA Cadillac Tax Early Next Year

December 16, 2016

This week, HR Policy and 32 other trade associations urged Congress in a letter to repeal the Affordable Care Act's "Cadillac Tax" on health benefits and "not to take additional action to cap the individual tax exclusion for employer-provided health care benefits, or limit employers' deductibility of health care expenses."  The letter notes the Congressional Budget Office has determined imposing a limit on the tax exclusion of employer-provided health care benefits would:
  • "Increase the financial burden on some people with substantial health problems;"
  • "[P]robably limit some people’s access to health care and cause them to forgo some care;"
  • Reduce "the use of effective care... accompanied by worse health for some people;"
  • Potentially "decrease employers’ willingness to hire older workers or cause employers to reduce other forms of compensation for older workers, such as cash wages or contributions to pension plans;" and
  • "[L]ead fewer employers to offer health insurance, thus increasing the number of uninsured workers."
The letter goes on to say that employers have "led in the transition to consumer-driven health benefits and wellness programs," and are engaged in innovative delivery system reforms that lower the actual cost of delivering quality health care.  The letter further notes that we look forward to working with Congress "to design legislation that can help increase Americans’ health insurance coverage options, improve the quality of health care, and take critical action to apply downward pressure on the real drivers of health care costs, without imposing new taxes on Americans."  The American Health Policy Institute held a Board of Governors conference call this week to discuss the latest developments in health care reform and to receive Governor input on how to react to these ever-changing developments in order to make the case for helping companies provide the best possible employer-sponsored health insurance.