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A tax win amid government-funding fiasco

January 24, 2018
2:25 PM

The controversial “Cadillac tax” was granted another two-year delay as part of the government-funding legislation signed into law by President Donald Trump earlier this week. This is the second such delay granted by lawmakers (the first was passed in 2015), and delays the effective date of the tax until 2022. Rep. Mike Kelly (R-PA) was among the bi-partisan group of lawmakers instrumental in securing the delay. 

Your federal government affairs team – the Big “I” – has long opposed the Affordable Care Act’s (ACA) 40 percent excise tax, or “Cadillac tax,” which originally was scheduled to go into effect in 2018 on health benefits that exceed an established annual cost. Without the delay, starting this year, health plans exceeding $10,200 in value for individuals or $27,500 in value for families would have been subject to the 40 percent tax.

The Big “I” has spent several years educating members of Congress on the harmful effects of this tax, stressing that although this provision of the ACA is billed as a tax on high-cost plans, thus dubbed the “Cadillac tax,” over time the tax will impact a majority of individuals. This is because Congress tied the threshold to a slow measure of inflation that will not keep up with the rising cost of healthcare.

While not a repeal, this additional two-year delay passed by Congress goes a long way toward paving the way for future efforts to repeal the tax fully.