Cadillac Tax Remains Even as Majority of Senate Votes to Repeal It

Federal Health Care Reform

With this round of health care reform efforts appearing to have died on the Senate floor, the Affordable Care Act's Cadillac tax remains, meaning 28 percent of employers may have to begin paying the tax on their largest health care plans in 2020 unless a delay can be added to a different measure, such as a tax reform bill.  Despite the GOP setback, during the debate the Senate voted 52 to 48, including two Democrats, for an amendment to permanently repeal the Cadillac tax, showing there will likely be bipartisan support for full repeal on some future bill.  Going forward, we can expect a new round of congressional hearings in September on repairing the ACA, and Congress must renew the Children's Health Insurance Program before October 1, 2017, potentially creating a legislative vehicle for enacting ACA reforms on a bipartisan basis.  Separately, HR Policy Association sent a letter urging Congress to strengthen ERISA preemption, repeal the Cadillac tax, refrain from imposing any new taxes on employee health care benefits, and avoid misguided policy decisions that could ultimately disrupt and threaten employer-provided health care benefits, which the majority of Americans currently enjoy.