Cadillac tax repeal passes in House

The House voted 419-6 to pass a bill repealing the ACA's "Cadillac tax" on lavish employer health plans.

The Cadillac tax is a 40 percent excise tax on excessive employer-sponsored coverage — anything over $11,200 for individuals or $30,150 for families. The tax was a largely unpopular provision of the law, and it has been delayed twice since the ACA was passed. It goes into effect in 2022.

The bill was reintroduced in January by Rep. Joe Courtney, D-Conn., who opposes the tax because he believes it would ultimately burden workers, as employers shift more costs onto them or cut back on benefits to avoid the tax. Mr. Courtney's website also notes actuarial analysis has suggested the tax could disproportionately affect some groups, such as older workers and women.  

Though largely unpopular, the tax was intended to be one of the main revenue-generating taxes for the ACA. If the Cadillac tax is repealed, it could increase the federal deficit by nearly $197 billion over the next 10 years, according to the Congressional Budget Office.

 

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