Government affairs

Today, the House of Representatives voted 419-6 to repeal what is referred to as the ‘Cadillac tax,’ which is a 40 percent excise tax on high-cost employer-provided health insurance.

The tax was one of many that were passed under the Affordable Care Act to help pay for other provisions in the bill, but had been delayed from going into effect twice before and is now set for 2022. Should it go into effect, the Congressional Budget Office and Joint Committee on Taxation projected it would collect some $193 billion in revenue through fiscal year 2029. The ‘Middle Class Health Benefits Tax Repeal Act’ (H.R. 748) would permanently repeal that tax.

The bill sparked overwhelming bipartisan support in the House and numerous comments from lawmakers.

“New economic evidence suggests that this tax on high-cost insurance plans is more likely to shift health costs to working families who are covered under employer-based plans than to slow the growth in overall health care costs any further,” said House Democratic Leader Steny Hoyer (D-MD). “As a result, there is now a strong case for repealing it.”

"If we fail to repeal the Cadillac tax, we will leave working families with less health care coverage, higher out-of-pocket health care costs and little to no wage increases," said House Ways and Means Committee Chairman Richard E. Neal (D-MA).

“I'm sure people are back home saying, ‘They can't do anything,’” said Rep. Mike Kelly (R-PA). “Well I'm here to tell you, today that's just not true. You are going to see a bipartisan effort today.”

The six members to vote against the bill’s passage include: Reps. Andy Harris (R-MD), Chip Roy (R-TX), Jim Cooper (D-TN), Ron Kind (D-WI), Scott Peters (D-CA), and Justin Amash (I-MI).

Following House passage, the bill now proceeds to the Senate where it is unclear whether the bill will progress this year, if at all. In response to questioning on the bill, Senate Finance Committee Chairman Chuck Grassley (R-IA) said, “you’re talking about something coming up in 2021,” before continuing by stating the Senate will focus on more pressing issues as the tax.

While the ‘Cadillac tax’ does not apply to letter carriers or other postal employees, NALC supports H.R. 748 and along with the Federal-Postal Coalition (of which NALC is a member), sent a letter to Members of Congress in support of the bill (viewable here) and will keep its members up to date and the bill’s progression.