WASHINGTON, D.C. – As the Senate and House consider the end-of-year appropriations bill, U.S. Sen. Sherrod Brown (D-OH) lauded inclusion of a provision that will protect working Americans by delaying the health law’s so-called “Cadillac tax.” The Affordable Care Act (ACA) imposes a 40 percent nondeductible excise tax on health plans with values exceeding $10,200 in coverage for singles and $27,500 for families beginning in 2018. The provision is indexed to inflation and will rise automatically over time, potentially affecting all employer-sponsored plans. If the tax goes into effect, employers could shift the cost of the tax to employees by raising deductibles and increasing other out-of-pocket costs. The omnibus bill delays the tax for two years, until 2020.
“A delay of the Cadillac tax is welcome relief for middle-class workers who shouldn’t be stuck with higher out-of-pocket costs or lower quality health care,” said Brown. “While I plan to continue working with my colleagues toward a full repeal of this tax, a two-year delay of the implementation date of this harmful tax will temporarily ensure that the cost of care isn’t shifted to workers in the short term. Hardworking Americans should never have to make serious medical decisions based on whether or not their benefits will trigger this tax.”
Brown is the sponsor of the American Worker Health Care Tax Relief Act of 2015, which would repeal the tax and includes a “Sense of the Senate” clause demanding that the repeal be offset so that it does not increase the federal deficit or negatively impact the health insurance coverage of the 9.9 million Americans who have received coverage because of the health law. Over the next 10 years, the excise tax is projected to raise $91 billion in revenue. The bill would demand that repeal is accompanied by a proposal to offset lost revenue to prevent an increase in the federal deficit and protect the integrity of the health law.