House bill seeks to delay employer mandate, excise tax

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Multiple members of the House Ways and Means Committee on Tuesday introduced several bills to delay the implementation of taxes related to the Affordable Care Act, including one piece of legislation which provides three years of retroactive relief and one year of prospective relief from the employer mandate paired with a one-year delay of the Cadillac tax.

H.R. 4616, introduced by Reps. Devin Nunes (R-Calif.) and Mike Kelly (R-Penn.), if passed would provide for a temporary moratorium on the employer mandate until Jan. 1, 2019 and delay for one year to December 2020 implementation of the excise tax on high cost employer-sponsored health coverage.

The legislation is a helpful step for employer sponsors of health plans, says American Benefits Council President James A. Klein.

"We thank them, as well as Ways and Means Committee Chairman Kevin Brady … for voicing support of the employer-sponsored system,” he says. “We look forward to working with them to enact legislation fully repealing the harmful 40% Cadillac tax and the burdensome employer mandate."

If tax reform were to repeal the ACA individual mandate, it is essential that it also provide relief from the employer mandate penalties, he explains.

"We know Congress faces many challenges and a long to-do list," Klein adds. "But at a time of great instability in the individual insurance market, it is crucial that lawmakers protect the employer-sponsored system covering more than 178 million Americans. We look forward to working with Reps. Kelly, Nunes and Brady toward that goal."

The pieces of legislative are designed to level the financial playing field between an individual purchasing coverage on their own and employer offering coverage to their employees, says Tom Avery, principal and founder at Folsom, Calif.-based brokerage Innovative Broker Services.

"If enacted, these legislative initiatives will not repeal the mandate but rather remove the penalty or excise tax for being levied which has been a burden on employers and individuals alike," he says. "As you can imagine, this is a double edge sword because the insurance carriers could raise premiums because their enrollment pool will shrink. Carriers will be concerned that only the sick will continue to keep coverage."

Other pieces of legislation introduced Tuesday include:

  • H.R. 4617, introduced by Reps. Erik Paulsen (R-Minn.) and Jackie Walorski (R-Ind.), that delays the medical device tax by five years.
  • H.R. 4618, introduced by Rep. Lynn Jenkins (R-Kan.), that provides relief for two years from the tax on over-the-counter medications, expanding access and reducing healthcare costs by allowing for reimbursement under consumer-directed accounts.
  • H.R. 4620, introduced by Rep. Kristi Noem (R-S.D.), which changes from 2018 from the health insurance tax that drives up healthcare costs, if the insurer provides the plan holder with a premium rebate and delays the tax in 2019 for all insurers.
  • H.R. 4619, introduced by Rep. Carlos Curbelo (R-Fla.), which delays for two years the health insurance tax, for health care plans regulated by Puerto Rico.

“Obamacare’s failures are continuing to hurt families across the country – and allowing burdensome healthcare taxes to continue or go back into effect would make these problems even more severe,” said Ways and Means Committee Chairman Kevin Brady (R-Texas). “As we continue working toward a patient-centered healthcare system, Ways and Means Republicans are taking action to provide targeted relief from taxes that stand in the way of affordable healthcare, innovative treatments, access to medications, more jobs, and bigger paychecks for hardworking Americans.”

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Healthcare-related legislation Healthcare reform Obamacare Cadillac tax Employer mandate