Cadillac Tax Repeal

Repeal of Cadillac Tax Protects Affordable Health Care for Millions - Especially Retirees

by Robert Roach, Jr.

The House recently passed H.R. 748, the Middle Class Health Benefits Tax Repeal Act. It repeals the 40 percent tax on employer-provided health care plans scheduled to take effect in 2022. 

The excise tax, commonly referred to as the “Cadillac Tax,” H.R. 748 passed by a wide margin with Republican and Democratic members voting for it. Now we need the Senate to pass it and send it to the president for signature. 

This excise tax is part of the Affordable Care Act (ACA), and it was initially conceived as a way to tax wealthy Americans’ high-premium plans to help provide coverage for uninsured individuals and families. In reality, the tax would disproportionately affect middle-class workers and families, and the labor movement has been working hard to repeal it for years.

If it goes into effect, the tax would affect private health care plans, which cost at least $11,200 annually for individual coverage and $30,100 for family coverage. 181 million Americans’ employer-provided health plans would be taxed. 

Experts say that employers will increase premiums and deductibles and even reduce health coverage to avoid paying it. 

Retiree health insurance plans would be especially hard hit. If the tax is implemented, employers could cut benefits for retirees younger than 65 and stop supplemental Medicare coverage for retirees 65 and over. 

Passage of this bill is long overdue and a rare bipartisan moment for the House. We must press the Senate to take action and kill this unfair tax immediately. 

Robert Roach, Jr. is president of the Alliance for Retired Americans.  He was previously General Secretary‐Treasurer of the IAMAW.  For more information, visit www.retiredamericans.org.