01/26/2018

Stopgap CR Delays Cadillac Tax

The tax is opposed by many Republicans and Democrats

The stopgap spending deal reached by Congress on Monday ended the brief government shutdown, but also delayed three Affordable Care Act (ACA) taxes.

While funding for the Children’s Health Insurance Program (CHIP) was a key negotiating point in discussions to reopen the government, the continuing resolution (CR) (H.R. 195) passed by the House and Senate Jan. 22 also delays the so-called “Cadillac” tax on high-cost employer-sponsored health plans until 2022. The tax is opposed by many Republicans and Democrats, and there had already been a prior suspension of the tax until 2020. Many business groups and unions, the American Society of Association Executives (ASAE) included, have advocated for doing away with the tax entirely, and the two-year delay in the CR will allow more time to work toward full repeal.

The bill also delays for two years the ACA’s 2.3 percent medical device tax, which has long been fought by the healthcare industry, and includes a one-year suspension of a tax on health insurers. According to a Joint Committee on Taxation (JCT) report, the total cost of delaying these taxes is $31 billion over a 10-year period. Delaying the Cadillac tax alone will cost $14.8 billion.

The CR funds the government through Feb. 8. Congressional Republicans say another stopgap funding bill may be needed to allow time to negotiate a budget deal that would cover the rest of fiscal 2018.

This article was provided to OSAE by the Power of A and ASAE's Inroads.