The Indiana Chamber previously signed on to a stakeholder letter to Congress urging repeal of the “Cadillac Tax.” On July 17, the U.S. House of Representatives voted on H.R.748, the Middle Class Health Benefits Tax Repeal Act of 2019, which repeals the 40% excise tax on employer-sponsored health care coverage for which there is an excess benefit (high-cost plans).
The repeal applies to taxable years beginning after December 31, 2019. The measure passed in an overwhelmingly bipartisan vote of 419-6. All of Indiana’s delegation was supportive. Full bill details are available here.
The Cadillac Tax, set to take effect in 2020, would force a large number of Indiana employers to either 1) reduce the value of health care coverage they provide to their employees by raising deductibles, co-pays, out-of-pocket maximums and/or premiums, or 2) pay a substantial tax because the health care coverage they provide to their employees has been deemed “too rich”.
The tax would have the detrimental effect of reducing benefits for employees and increasing the cost of business for employers. It is regressive in its approach and will have a negative impact on an employee’s health care costs as well as on our economy as a whole.
The bill has now been placed on the Senate Legislative Calendar. We will be communicating once again to Sens. Todd Young and Mike Braun the importance of repealing the Cadillac Tax.
Another health care interest of the Chamber and many employers is the medical device tax. Representative Jackie Walorski (IN-02) has again encouraged a House vote on bipartisan bills to repeal the medical device tax. Walorski spoke in support of a procedural effort to amend H.R. 748 to include the Protect Medical Innovation Act (H.R. 2207). Unfortunately, her effort was defeated. The tax has been burdensome on Indiana’s medical device manufacturers.
Resource: Greg Ellis at (317) 264-6881 or email: [email protected]