Houses Votes to Repeal Cadillac Tax

American Health Care Bill and Pre-tax Benefit Accounts

On July 17, 2019, House passed H.R. 748, the Middle Class Health Benefits Tax Repeal Act, to repeal the “Cadillac Tax”. The bill passed by a nearly unanimous vote in favor of repeal.

What is the Cadillac Tax?

The Cadillac Tax was originally passed in the Affordable Care Act as a cost-containment measure. It would have penalized or taxed employer-sponsored plans, which exceeded a set cost / benefit threshold. This tax was originally set to go into affect in 2018 but was delayed numerous times. Not withstanding the passage of this bill, it is currently scheduled to go into effect in 2022.

What does H.R. 748 propose?

H.R. 748 would permanently repeal this tax. Unlike prior legislative action which simply delayed the implementation, H.R. 748 would eliminate it.

What is the next step?

With the passage in the House complete, repeal of this tax is in the Senate’s court. The Senate is anticipated to take up the bill. The Senate companion bill, S.684, introduced in March by Sens. Martin Heinrich, D-N.M., and Mike Rounds, R-S.D., currently has 42 co-sponsors.

Watch for updates regarding Cadillac Tax Repeal!