Login Register Subscribe
Current Issue

Delay of Cadillac tax included in budget passed by House

Reprints

The U.S. House of Representatives on Friday passed a $1.1 trillion omnibus spending bill that includes a provision to delay the “Cadillac” tax on costly group health plans by two years.

The House passed the deal by a 316-113 vote, and the U.S. Senate is expected to vote over the weekend.

The spending deal would push the start date of the Cadillac tax — a 40% excise tax on the part of group health plan premiums that exceed $10,200 for single coverage and $27,500 for family coverage — to 2020 from 2018.

“The House’s approval of a two-year delay of the ‘Cadillac Tax’ brings us one step closer to its ultimate repeal,” James Klein, president of the American Benefits Council, said in a statement Friday. The council has urged for the tax’s repeal on behalf of hundreds of large U.S. empoyers.

“The overwhelming support for delay underscores the looming danger this tax poses for businesses that want to provide quality health coverage for their employees. We urge the Senate to follow suit and approve the measure,” Mr. Klein said.

The proposed budget deal also would have the U.S. comptroller general and the National Association of Insurance Commissioners study whether the reform law uses a “suitable” benchmark to determine whether the excise tax thresholds should be adjusted to reflect age and gender factors of an employer’s workforce.

The claims data of the benchmark the law now uses — Blue Cross Blue Shield’s standard benefit option under the Federal Employees Health Benefits Program — has been criticized by the American Benefits Council for being what the council says is as an inaccurate representation of the national workforce.