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Business, Labor Agree: Repeal the Excise Tax

Congressman Joe Courtney’s legislation, the Middle Class Health Benefits Tax Repeal Act, has earned the endorsement of more than 30 business, labor, and health groups:

Kate Hull, Executive Director, Corporate Health Care Coalition:“Employers have worked diligently to reduce health care costs while maintaining quality benefits. Despite these efforts, it is clear that the 40 percent excise tax will be unavoidable for many employers. A survey by a Towers and Watson revealed that over half of large employers are expected to be impacted by the excise tax in 2018, and this number is projected to rise to 82 percent by 2023… While the 40 percent tax does not become effective until 2018, the impact of the 40 percent excise tax is being felt now, as employers have to make benefit design decisions for future plan years in an effort to avoid the tax.”

Harold Schaitberger, General President, International Association of Fire Fighters:“This tax was also sold as targeting only wealthy Americans with lavish health plans providing generous benefits. But that simply is not true. In fact, the majority of plans that would fall victim to this tax cover working class, middle-income Americans. Fire fighters especially fall into this category because of the nature of their profession. America’s first responders rely on a strong and comprehensive health plan because of the dangerous and strenuous demands of the fire service. Often times they will choose to protect their health care over increased pay for just that reason.”

Joseph F. Brennan, President, Connecticut Business & Industry Association:  “CBIA represents thousands of employers of all sizes in Connecticut. The cost of healthcare remains one of the biggest challenges facing companies across the state. The specter of the excise tax only adds to the difficulty in providing affordable, comprehensive health benefits to their employees… The lack of predictability is particularly vexing for employers as they try to manage their health benefit plans. That’s why it is critical to repeal the tax now, before it causes any more disruption in the healthcare marketplace.”

Scott Frey, Director of Federal Government Affairs, AFSCME:“AFSCME strongly supports your repeal bill because this tax is already lowering benefits, shifting health costs onto workers and increasing out-of-pocket health spending. For example, a recent survey of employers by Aon Hewitt reports 62% say they are already making significant changes to their health plans for 2015 and 33% are reducing the richness of their plan designs through higher out-of-pocket costs. …the 40% tax is a poorly targeted, ineffective, and blunt tool.”

James A. Klein, President, American Benefits Council:“Unless repealed, this ‘Cadillac tax’ will eventually apply to every health plan vehicle on the road, especially damaging plans with large numbers of women, older workers and families living in areas where health services are expensive.”

Katie Mahoney, Executive Director of Health Policy, U.S. Chamber of Commerce:“The 40% excise tax will undermine what everyone’s vision of health reform was, is and should be.  Instead of providing greater access to health care coverage and services, this tax will make it more costly for people to obtain important health care services and ultimately dilute the protection that health care coverage was designed to provide… This tax if not repealed will eviscerate the coverage that has historically been the most dependable and stable form of affordable health care coverage for millions of Americans.  The goal we all share and hope to achieve is to expand access for those that do not have health care coverage through their employer, not undercut or take it away – but unfortunately the tax will do just that.”