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Cadillac Tax Repealed

The tax on employer-sponsored health insurance benefits, known as the “Cadillac” tax, was set to begin on January 1, 2022 after being delayed twice. However, on Friday, President Trump signed a bill into law passed by Congress to fund the federal government and repeal the tax that was originally part of the Patient Protection and Affordable Care Act passed in 2010. 

The “Cadillac” tax would have required all of our coverage providers to pay a 40 percent excise tax levied on “excess benefits,” or the value of health insurance benefits surpassing approximately $11,200 for individuals and $30,150 for families in 2022. With the climbing costs of health care, this tax would have encouraged employers to reduce the value of health benefits provided to employees to avoid the tax. Instead, employers would have tried to negotiate more compensation in the form of wages that are taxed by the income tax rates.

Working in coalition with the Alliance to Fight the 40 since 2015, the United Brotherhood of Carpenters and Joiners worked across party lines to help preserve the employer-sponsored health system that covers more than 178 million Americans. The repeal included in the spending bills garnered 71 votes by the Senate and 419 in the House and is estimated to reduce revenue collections by nearly $200 billion over the next 10 years.

The Alliance to Fight the 40 is a broad-based coalition made up of private sector businesses, local governments, advocates, unions, employers, consumer groups and more. This alliance was formed to repeal the “Cadillac Tax” on health benefits while preventing increased taxes on workers, families and retirees. 

For more information, click here: https://bit.ly/38Zi3iu