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Opposition Is Building to the Onerous "Cadillac Tax"

Set to take effect in 2018, opposition is already building to the 40% excise tax on so-called "overly generous" health insurance plans, known as the "Cadillac Tax," as part of the Affordable Care Act...
July 29, 2015

Set to take effect in 2018, opposition is already building to the 40% excise tax on so-called "overly generous" health insurance plans, known as the "Cadillac Tax," as part of the Affordable Care Act (ACA). PIA has endorsed repeal of this tax.

A new coalition comprised of major corporations, including Cigna and Pfizer, as well as union groups and associations, called the "Alliance to Fight the 40," is beginning a formal campaign against the tax. Two repeal bills have been introduced in Congress, the "Ax the Tax on Middle Class Americans' Health Plans Act" (H.R. 879), introduced by Rep. Frank Guinta (R-NH); and the "Middle Class Health Benefits Tax Repeal Act of 2015" (H.R. 2050), introduced by Rep. Joe Courtney (D-CT).

"PIA strongly supports repeal of the 'Cadillac Tax' because it will impact not just high-benefit plans, but moderate-benefit plans, and it could have an unequal impact based on the age, gender, family-size and geographic location of an employer's workforce," said PIA National Director of Federal Affairs Jon Gentile. "This tax has the added consequence of punishing people enrolled in private sector health plans by hitting them with a 40% surtax, simply because they have good coverage. That's inherently unfair."

In addition, PIA submittedcomments to the Internal Revenue Service (IRS) seeking guidance on how the tax will be calculated and offering suggestions to help stem unintended consequences of the law.

Health Care Tax Faces United Opposition (New York Times 7/21/15)

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