An important provision of the Affordable Care Act (ACA) is a new target for repeal. On April 28, 2015, Rep. Joe Courtney (D-CT) introduced legislation (H.R. 2050) to eliminate the 40% excise tax on high-premium "Cadillac" health insurance plans. Set to take effect in 2018, the tax will apply to plans costing more than $10,200 for individual-only coverage, and more than $27,500 for family coverage. Although referred to as a tax on "Cadillac" plans, its impact is far broader and would likely implicate many employer-sponsored plans.
In a press release, Rep. Courtney claims "The excise tax is a poorly designed penalty that will put a dent in the pocketbooks of many families and businesses with health insurance plans that do not resemble the 'Cadillac' plans originally targeted when this policy was adopted . . . it is a flawed, one-size-fits-all penalty that will degrade workers' benefits, lead employers to choose less comprehensive plans, and force families to pay more out-of-pocket health care costs."
Opposition to this tax has been building over the years. It was originally slated to take effect in 2013, but was delayed five years after a collation of lawmakers voiced concern about its potential impact. This new legislative move to repeal it entirely has rebranded the Cadillac tax as a penalty on employee benefit plans because of its forecasted burden on both businesses and individuals. This repeal effort is notable in that it was introduced by a Democratic congressman who otherwise has expressed support for the ACA. Unions and employers alike have expressed concern with the tax, increasing the prospects for legislative and/or regulation changes.
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