The Building Tradesman Newspaper

Friday, June 28, 2019

'Cadillac Tax' may finally meet its demise

By The Building Tradesman



Nobody in organized labor much cares for the Cadillac Tax. It's not terribly popular in Congress, either.

Now there's legislation in place that would permanently rid the specter of the tax on high-quality ("Cadillac") health insurance plans - among them those administered by organized labor and their employers. 

Birthed as part of the Obama Administration's Affordable Care Act, the Cadillac Tax was supposed to go into effect in 2018, but aggressive employer and union lobbying has twice led Congress to put the tax plan on the shelf, moving implementation back until 2022. 

Now, the National Electrical Contractors Association (NECA) reports, Cadillac Tax repeal legislation is back: House Resolution 748 has a multitude of co-sponsors in the House and enjoys bipartisan support in the Senate. The legislation was introduced by Reps. Joe Courtney (D-Conn.) and Mike Kelly (R-Pa)..

"The Cadillac Tax repeal bill, H.R. 748 - the Middle Class Health Benefits Tax Repeal Act of 2019 - has reached nearly 390 cosponsors in the House and remains a bipartisan topic in the Senate," NECA says. "With the legislation now garnering enough support to trigger a new House legislative rule known as the consensus calendar, which will allow for legislation with broad support to be brought to the floor on an expedited path, House leadership has begun to weigh their options as to how to best address the vote itself.

"NECA continues to work with a broad coalition of associations, labor groups, and other employers to encourage both House and Senate leadership to repeal the onerous tax on companies who choose to do the right thing and offer top of the line health insurance to their employees."

The Cadillac Tax was seen as a way to shift the cost of funding health care benefits provided under the Affordable Care Act for all Americans onto the backs of high-quality insurance plans, often run by unions and their employers. Before Congress intervened, starting in 2018, such employers were supposed to begin paying a 40 percent  tax on costs of health plans that provide above $10,200 per individual and $27,500 for family coverage. 

The legislation is supported by several organizations, including the American Benefits Council and the AFL-CIO. “Employers provide health coverage to more than 180 million Americans. We applaud the strong bipartisan support to repeal the Cadillac tax the burden it will place on working families and employers,” said James A. Klein, American Benefits Council president. “The tax hits plans that are not ‘overly generous’ but, rather, are expensive for reasons beyond the control of employers and families who need coverage to protect themselves from financial ruin.”