Congress is unlikely to repeal the so-called “Cadillac tax” on high-cost health insurance plans next year, according to economists who spoke with Bloomberg BNA this week.
While there is widespread support for repealing the tax, there are questions about how to replace the estimated $91 billion it’s estimated to raise, and since lawmakers have already delayed the tax until 2020, there isn’t a great sense of urgency for Congress to act this year, according to Bloomberg analysts.
Dislike of the Cadillac tax has become pervasive among Republican and Democratic lawmakers alike, as it would likely result in a reduction of benefits for millions of Americans. ASAE filed two sets of comments with the IRS last year, suggesting that employers will look to make changes to their benefit plans to avoid the tax. These changes will reduce benefits and transfer the cost of insurance to employees through increased deductibles, reduced covered services, use of private exchanges, and the reduction or elimination of FSAs, ASAE argued.
Last fall, Democratic presidential candidate Hillary Clinton broke with the Administration by saying the Cadillac tax should be repealed. “My proposed reforms to our health care system would more than cover the cost of repealing the Cadillac tax, while also reining in skyrocketing prescription drug costs and out-of-pocket expenses for hard-working families,” Clinton said.