Bill Seeks to Repeal Cadillac Tax

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H.R. 2050 was recently introduced by Rep. Joe Courtney (D-Conn) along with 71 co-sponsors that would repeal the Excise Tax on high-cost health coverage, also known as the “Cadillac Tax.” Effective on January 1, 2018, it imposes a 40 percent excise tax on plans that exceed a certain premium cost threshold. For 2018, the thresholds are $10,200 for self-only coverage and $27,500 for family coverage but may be increased based on several adjustment factors.

The statement released by Rep. Courtney noted that a study by the actuarial firm Milliman “reported that nearly 70 percent of variance in health insurance premiums is explained by geographic location, while just six percent of variance is due to the comprehensiveness of the benefits. Since the excise tax is determined solely by premium cost—not the quality or “richness” of a plan’s benefits—it will unfairly impact older workers, women, and people who live in areas where health care costs are high.”

While employers and unions have both expressed concerns about the tax, it remains to be seen whether H.R. 2050 will progress through Congress.