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house Bill H.R. 173

Should the Obamacare “Cadillac tax” on High Cost Employer-Sponsored Health Insurance Plans be Repealed?

Argument in favor

The Cadillac tax unfairly punishes businesses for offering their employees with a broad variety of health insurance plans. It should be repealed so that workers aren’t subjected to higher premiums and deductibles, because the increased cost would be passed on to them.

BakoKristy's Opinion
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01/19/2017
I am a county employee in an poorer county of California. I am at the middle management level. Our county civil servants have a self ensured health care plan. I make less than six figures a year and yet I would fall into the category that would require me to pay this huge increase for my insurance. Our department's employees have not had raises (not even cost of living) in eight years. I bring home less and less each year due to increases in my share of cost and my premiums going up every year. Plus I have to pay for my retirement without any kick in by the county. So it isn't true that only high paid executives have "Cadillac" health care plans. I would never be able to retire if the cost of my health insurance increased by that amount in 2020.
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Max's Opinion
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01/19/2017
Why should the government essentially punish you for having better insurance?
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Loraki's Opinion
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01/19/2017
ALL OF OBAMACARE SHOULD BE REPEALED! Everything associated with it needs to GO!
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Argument opposed

Not only will it provide much needed tax revenue, but the Cadillac tax actually promotes greater economic efficiency by trying to reduce the use of a tax exclusion that allows employers to exclude what they pay in employee health benefits from their taxable income.

Kristi's Opinion
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01/19/2017
I am a former republican and these recent shenanigans are why I left the party, decisions being made based on partisanship instead of people. Repeal will affect so many people adversely. Why not try to improve the ACA? You can still take credit for saving the day. Repeal without a solid plan is a disaster for the party in the long run.
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Erum 's Opinion
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01/19/2017
Reducing and eliminating these taxes will effectively defund the Affordable Care Act. Congress needs to stop chipping away at Obamacare and focus on cuts towards Defense spending and the new President's conflicts of interest.
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Seth's Opinion
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01/20/2017
Do not repeal any funding for the ACA until a comprehensive alternative plan has been proposed.
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
  • The house has not voted
      house Committees
      Committee on Ways and Means
      Health
    IntroducedJanuary 3rd, 2017

What is House Bill H.R. 173?

This bill would repeal the Affordable Care Act’s so-called “Cadillac tax” which imposes a 40 percent excise tax on high-cost employer-sponsored health insurance plans. The Cadillac tax is currently scheduled to take effect in 2020, and would apply to health plans that are valued at more than $10,200 for individuals or $27,500 for families. Premium payments made by both employers and employees plus contributions to a variety health savings / spending accounts count toward that total.

Under current law, health benefits provided by employers are excluded from their taxes, which can incentivize employers to pay a greater share of their employees’ compensation in the form of health benefits rather than in wages. The Cadillac tax essentially creates a cap on this tax exclusion by imposing a tax on high-cost health plans offered by employers. It also is not currently indexed to inflation or healthcare costs, meaning that as health insurance plans get more expensive more people will end up paying the tax.

Impact

Employees who are enrolled in and employers who offer high-cost health insurance plans; and the federal government.

Cost of House Bill H.R. 173

A CBO cost estimate is unavailable.

More Information

In-Depth: Sponsoring Rep. Mike Kelly (R-PA) introduced this bill to repeal the Cadillac tax, which he called a “major reason why the so-called Affordable Care Act will make health care even less affordable and accessible for so many households across America,” and added:

“Sensible health care policy should encourage employers to offer a full range of health plans to their associates, not punish them with an unfair tax for doing so. The sad result will be higher deductibles and fewer services for hardworking Americans. With most Pennsylvanians covered by employer-sponsored health insurance, this Obamacare tax will be a disaster felt especially close to home.”

This bill has the bipartisan support of 11 cosponsors in the House, including seven Democrats and four Republicans.


Of Note: The Cadillac tax was originally slated to take effect in 2018, but a provision delaying it for two years was included in an omnibus spending bill that was enacted in December 2015. An analysis done by the Kaiser Family Foundation found that the tax will impact about 42 percent of American employers and their employees.


Media:

Summary by Eric Revell
(Photo Credit: Gedstrom / Creative Commons)

AKA

Middle Class Health Benefits Tax Repeal Act of 2017

Official Title

To amend the Internal Revenue Code of 1986 to repeal the excise tax on high cost employer-sponsored health coverage.

    I am a county employee in an poorer county of California. I am at the middle management level. Our county civil servants have a self ensured health care plan. I make less than six figures a year and yet I would fall into the category that would require me to pay this huge increase for my insurance. Our department's employees have not had raises (not even cost of living) in eight years. I bring home less and less each year due to increases in my share of cost and my premiums going up every year. Plus I have to pay for my retirement without any kick in by the county. So it isn't true that only high paid executives have "Cadillac" health care plans. I would never be able to retire if the cost of my health insurance increased by that amount in 2020.
    Like (78)
    Follow
    Share
    I am a former republican and these recent shenanigans are why I left the party, decisions being made based on partisanship instead of people. Repeal will affect so many people adversely. Why not try to improve the ACA? You can still take credit for saving the day. Repeal without a solid plan is a disaster for the party in the long run.
    Like (365)
    Follow
    Share
    Reducing and eliminating these taxes will effectively defund the Affordable Care Act. Congress needs to stop chipping away at Obamacare and focus on cuts towards Defense spending and the new President's conflicts of interest.
    Like (124)
    Follow
    Share
    Do not repeal any funding for the ACA until a comprehensive alternative plan has been proposed.
    Like (72)
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    Why should the government essentially punish you for having better insurance?
    Like (57)
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    When the wealthy get a tax break, the middle class usually gets stuck with making up the shortfall, or programs that benefit the middle class get decimated through cuts. The wealthy need to contribute to the benefits they get living in this country. Middle class families shouldn't pay more in taxes than billionaires like Trump, who has paid nothing for a couple of decades! People deserve healthcare coverage, not just healthcare availability.
    Like (41)
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    Access to these plans are limited by most employers to their executives, most of whom have incomes that are so far above other employees it staggers the ability to justify them. So it appropriate that they share the cost of healthcare for others, given the significant tax loopholes that are extended to their income bracket.
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    ALL OF OBAMACARE SHOULD BE REPEALED! Everything associated with it needs to GO!
    Like (33)
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    I am in favor of reducing any tax at any time for any reason. Why does the government arbitrarily get to charge a person and his/her employer a surcharge just because they've decided that some certain health plan is arbitrarily "too" nice?
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    We are middle class and my husband is in middle management. Yet somehow he brought in less every year to pay the rising premium for health insurance. We now cannot afford insurance and so are uninsured. This tax doesn't just affect those at the top. It cripples those in the middle.
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    The ACA can and should be improved. Build it up and make it better or put out a clear replacement plan before you tear it down.
    Like (23)
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    Stop cutting access to healthcare for poor people. Universal healthcare is a human right. We need to just accept that and stop lying to ourselves that it is economically efficient, let alone morally efficient to profit off the sickness of others. I don't want for-profit healthcare. Health insurance is a public good!
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    To whom much is given, much is expected. Corporations & wealthy get enough breaks. Help the less fortunate.
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    The Cadillac Tax was a Democrat taxing method to reach into a workingman's pocket. The Democrats hated business using health insurance as a expense on its balance sheet and a non-taxable income for the workers. "Social Justice" progressives can't have all that money missing the government coffers while they continue having their health plans paid for by taxpayers. And let's face reality- Does the Federal Government need to involve itself in Healthcare? Progressive have almost killed Healthcare with Obamacare. Take note: Venezuelan socialism has been a huge success.
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    It seems like taxing the highest end of availability so that everyone can have some coverage makes a lot of sense. If you can afford these "Cadillac" plans, you can afford to pay the tax. Repealing this seems like it would disproportionately hurt those who are already hurting while helping those who don't need help.
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    As an educator we are subject to this tax which would impact our pay directly. I don't think that teachers were the intended target of the Cadillac tax, but we would be its victims.
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    This tax only aims to redistribute wealth and punishes those who have worked hard to get ahead in life. No one is entitled to the fruits of someone else's labor.
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    Obamacare is collapsing under its own weight, it's not sustainable. Our nation is 20 trillion dollars in debt and growing, this too is unsustainable. This is what happens when politicians force legislation on us that they "have to pass to find out what's in it." We can't forget the false promises and the lies that went along with this mess: "If you like your healthcare plan you can keep your healthcare plan." "If you like your doctor you can keep your doctor." "Your healthcare premiums will go down."
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    Improve ACA, don't change anything about it until there are way better alternatives.
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    Piecemeal repealing will end in disaster
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