The tax would have slapped a 40 percent levy on the value of health insurance plans above $11,200 for single coverage and $30,100 for family policies beginning in 2022. "McConnell has been reluctant to take up health-care legislation, Senate aides said, because Democrats probably would use the opportunity to criticize Republicans' and the administration's efforts to dismantle the Affordable Care Act".
If passed by the Senate, the bill would fully repeal the provision that both Republicans and Democrats believe punishes the middle class.
"Today, we'll honor our promise to the hard-working men and women of the labor as we lift the "Cadillac tax" protecting health benefits that workers have negotiated, " House Speaker Nancy Pelosi, California Democrat, said on Wednesday. If the Senate passes the measure and the president signs it into law, the threat employers have faced from the tax would disappear.
Employers can reap large tax savings by compensating their employees in the form of more extensive health insurance, rather than wages, which are subject to payroll taxes.
"We commend the House for passing this legislation, which would repeal the so-called 'Cadillac Tax.' The Chamber has long supported the repeal of the Cadillac Tax, which is forcing employers to cut health benefits to employees and their families". Former Vice President Joe Biden, the front-runner in the race, has a less sweeping plan to bolster Obamacare, but it still would offer a public health insurance option funded by tax hikes on the wealthy.
The medical device industry in the United States will face a $20 billion tax increase when the excise tax goes back into effect 1 January 2020, unless Congress acts quickly.
Wojcik argued that most employer plans would be on track to trigger the tax within the next few years because the indexing is tied to overall inflation, which is rising slower than health care costs.
"I'm pleased the House voted to permanently repeal the "Cadillac Tax, '" said Senator Mike Rounds (R-SD)". "Any tax that raises the cost of health benefits will harm the millions of working Americans and their families who rely on and value employer-sponsored health coverage". The tax is created to hit more plans over time so that virtually everyone in an employer-provided plan, including low income workers and families with chronic or catastrophic health conditions, will ultimately be affected.
The measure to repeal it, H.R. 748, was passed under a fast-track procedure requiring two-thirds support among House members. The analysis also projected that the Cadillac tax would affect a growing share of employers over time, reaching 37% in 2030 without including FSA contributions (and 46% with them). "We need to start instilling some fiscal discipline in this place and making some tough decisions". "We hope Congress will repeal the device tax without delay".
The Senate has a similar bill with bipartisan support, but Senate majority leader Mitch McConnell, Kentucky Republican, has not yet said whether he will bring it for a vote.