Skip to main content
Sister Publication Links
  • ESG: THE IMPLEMENTATION IMPERATIVE
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Digital Health
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Transformation
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Unwell in America
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Government
July 15, 2015 01:00 AM

New lobbying group to grease wheels for 'Cadillac' tax repeal

Bob Herman
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Big businesses and unions, traditionally foes at the bargaining table, have both voiced disdain for the Affordable Care Act's “Cadillac” tax on generous health plans. Now, they plan on turning up the heat to repeal it.

    A coalition of large employers, business groups and unions—including the American Benefits Council, the Blue Cross and Blue Shield Association, Cigna Corp., Pfizer and Laborers International Union of North America—registered last week as a lobbying group. The group, called the Alliance to Fight the Forty, has the explicit goal of repealing the 40% excise tax.

    But the lobbying organization's members are tiptoeing around the popular “Cadillac” name attached to the tax. “We don't call it the Cadillac tax anymore,” said Kathryn Spangler, senior vice president of health policy for the American Benefits Council and a top lobbyist for the group. “The way it's structured, it'll ultimately hit bicycles.”

    President Barack Obama has criticized health plans with little cost-sharing and premium contributions as “fancy plans” that contribute to overconsumption of healthcare services. Many economists support the Cadillac tax as a way to manage the effects of the tax exemption for employer health insurance, which disproportionately benefits higher-income workers.

    But business and labor groups have slammed such a tax as costly, burdensome and unfair to employee benefits.

    Starting Jan. 1, 2018, all employer-based health plans with annual benefit values more than $10,200 for individuals and $27,500 for families will be subject to a 40% tax for every dollar above those thresholds. Those limits will be tied to inflation after 2018. The average individual health plan costs about $6,000 in 2014, while the average family policy costs $16,800, according to the Kaiser Family Foundation—both well below the Cadillac tax's upper limits.

    While the regulation is more than two years from going into effect, employers are ramping up pressure because they typically decide health benefits packages 18 months in advance, Spangler said.

    Many prominent companies and organizations have recently upped copayments and deductibles for their employees in anticipation of the Cadillac tax. The tax is also becoming a factor in some union's upcoming collective bargaining talks. The United Auto Workers, for example, is getting ready to negotiate health benefits with Detroit's three large automakers. Last month, UAW President Dennis Williams called the excise tax “unfair.”

    “Employers have been making changes to their plans in anticipation of that tax for a couple years now,” Spangler said. “That's only going to grow the closer we get to 2018.”

    In addition, with King v. Burwell now a historical footnote and the ACA mostly cemented as the law of the land, stakeholders are looking to make more calculated adjustments where they can.

    Similar to the medical-device tax, congressional support is swelling against the Cadillac tax. Two bills in the House have been introduced this year to repeal it—H.R. 879 and H.R. 2050. The latter, introduced in April, already has 120 co-sponsors from both sides of the aisle.

    What's unclear is how Congress would pay for the lost revenue that the Cadillac tax would bring in. The tax is expected to generate $87 billion from 2016 through 2025, according to the Congressional Budget Office. Only about a quarter of that money would come from employers that have coverage above the thresholds. A higher amount of taxes from employee wages would comprise the remaining three-quarters, the CBO said.

    Spangler said paying for an alternative would be difficult, but she mentioned how this year's Medicare doc-fix moved forward without a full offset.

    The Alliance to Fight the Forty will officially launch this month and will be active during Congress' August recess, Spangler said.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Abortion clinic
    Idaho hospital halts obstetrical care as abortion laws become stricter
    mh_20160711p29_bills_i.jpg
    State, local governments pay off medical debt relief with COVID funds
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Modern Healthcare Alert: Sign up for this breaking news email to be kept in the loop as urgent healthcare business news unfolds.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Digital Health
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Unwell in America
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing