Currently delayed for two years, the Affordable Care Act’s excise tax is on track for full repeal — but not without upcoming challenges, Members of Congress and their staffs said Wednesday on Capitol Hill in Washington.

Now set to take effect in 2020, the so-called Cadillac tax would force employers to pay a 40% tax on plans exceeding $27,500 for a family or $10,200 for an individual.

Sen. Martin Heinrich
Bloomberg/file photo

Speaking at a legislative summit sponsored by The Council of Insurance Agents & Brokers, Michelle Greenhalgh, legislative aide in Rep. Joe Courtney’s (D-Conn.) office, said that there were many hurdles to get the delay passed, and it is important that the momentum continue to get the tax fully repealed.

Teamwork between various stakeholders made the current delay possible, including insurance agents and brokers, rural electric CO-OPs, small businesses and unions, added Sen. Martin Heinrich (D-N.M.), who, along with Courtney and Sen. Dean Heller (R-Nev.), introduced legislation to fully repeal the Cadillac tax in November 2015. “The breadth of the coalition is what breathes so much life into our efforts,” Heinrich said.

“We are not done, but we are making progess,” he added about full repeal. “We are going to get this done; we are going to be successful. … We had an amazing team at the end of last year and we need to get the job done.”

Election effect

The 2016 presidential election may also factor into the repeal, as all candidates from both political parties have come out against the Cadillac Tax. “No matter who is in the White House, we will get a repeal done,” Greenhalgh explained. Right now, “it is so frustrating” that the [Obama] administration is the only side pushing back against repeal, she added.

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"We are going to get this done; we are going to be successful. … We had an amazing team at the end of last year and we need to get the job done."

As it stands now, the Cadillac tax has the potential to disrupt the intention of the ACA. “One thing that scares me [is] the potential for this to undermine all things ACA that focused on prevention and wellness,” Heinrich said. “That’s exactly what seems to have played out. … And exactly what we shouldn’t be doing in healthcare right now.”

Wellness and primary care save the entire system money and work more efficiently, he added.

For The Council, the Cadillac tax remains the No. 1 issue, said Joel Wood, the group’s senior director of government relations.


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