House Cad Tax Bill Letter

United States House of Representatives 
Washington, D.C. 20515 

Dear Representative: 

On behalf of HR Policy Association, I am writing to urge you to support the “Middle Class Health Benefits Tax Repeal Act of 2019” (H.R. 748).  The bipartisan bill would repeal the flawed 40 percent excise tax on employer-sponsored health care benefits.  The threat of the tax, which is scheduled to take effect in 2022, is already undermining benefits employees greatly value, and limiting innovative approaches to health and wellness that are reducing national health expenditures.  With this urgency in mind, we believe it is important for Congress to repeal the excise tax this year. 

The HR Policy Association is the leading organization representing chief human resource officers of over 390 of the largest employers in the United States.  Collectively, their companies provide health care coverage to over 20 million employees and dependents in the United States and spend more than $120 billion annually on health care benefits and related taxes.  About 31 percent of the Association’s member companies have one or more health care plans that will be subject to the excise tax in 2022. 

The American Health Policy Institute (AHPI) has published a number of studies on the harmful impact of the excise tax (here, here, and here).  According to one AHPI study, almost 19 percent of large employers already have curtailed or eliminated employee contributions to flexible spending accounts in order to avoid triggering the excise tax and almost 13 percent have curtailed or eliminated employee contributions to health savings accounts.  Moreover, the Congressional Budget Office has estimated that unless the excise tax is repealed, it will increase the financial burden on some people with substantial health problems, and reduce the use of effective care. 

Employers have a long history of innovating to improve the quality and cost of health care, and HR Policy members offer employees a host of benefits such as onsite medical clinics, wellness programs, health savings accounts, and low- or no-cost primary care services that are lowering unnecessary utilization.  The excise tax on health benefits will undermine the ability of employers to continue such innovations.  We look forward to working with Congress to repeal this damaging tax. 

Sincerely,  
D. Mark Wilson
Vice President, Health & Employment Policy