S. 58Senate115th Congress (2017-2019)In Committee

Middle Class Health Benefits Tax Repeal Act of 2017

Introduced January 9, 2017

AI-Generated Summary

Updated April 15, 2026 at 11:27 AM UTC

The Middle Class Health Benefits Tax Repeal Act of 2017 eliminates the federal excise tax on high‑cost employer‑sponsored health insurance, often called the Cadillac tax. By removing the tax provision and updating related definitions, the bill stops employers and employees from being subject to this additional payroll tax on expensive health plans. The changes apply to tax years starting after 2017 and affect all employers offering qualifying group health coverage.

Key Provisions

  • Repeals the excise tax on high‑cost employer‑provided health coverage (the “Cadillac tax”) by deleting section 4980I of the Internal Revenue Code.
  • Updates related tax language to remove references to the repealed section and adds a definition of “applicable employer‑sponsored coverage,” covering any group health plan that is excludable from an employee’s gross income.
  • Specifies that the coverage definition includes plans paid by either the employer or employee, government employee plans, and outlines how to calculate the cost of coverage for flexible spending arrangements and other employer‑contributed plans.
  • Sets the repeal and related changes to take effect for taxable years beginning after December 31, 2017.

Legislative Activity

Stay on top of the latest movement without scrolling through every action

1 earlier action
SenateIntro Referral Latest Action

Read twice and referred to the Committee on Finance.

January 9, 2017

View full timeline
SenateIntro Referral

Introduced in Senate

January 9, 2017

SenateIntro Referral

Read twice and referred to the Committee on Finance.

January 9, 2017

Floor Debate

6 members

What members said about S. 58 on the floor

3 Republicans3 Democrats
John Cornyn
Sen. John CornynR-TX · Feb 6, 2017

Madam President, last night we all witnessed a rather extraordinary event. Certainly for the first time in my time in the Senate, we saw rule XIX of the Standing Senate Rules invoked. That rule says:…

Richard J. Durbin
Sen. Richard J. DurbinD-IL · Feb 6, 2017

Madam President, I would like to respond to the statement made by the Republican whip, my friend from Texas, Senator Cornyn. This is day 20 of the Trump administration. Day 20. Not quite 3 weeks…

Tammy Baldwin
Sen. Tammy BaldwinD-WI · Feb 6, 2017

Madam President, I rise to urge my colleagues to join me in opposing the confirmation of our colleague Jeff Sessions to be Attorney General of the United States. I have great respect for Senator…

Jon Tester
Sen. Jon TesterD-MT · Feb 6, 2017

Mr. President, will the Senator from Illinois yield for a question? I say to Senator Durbin, there has been a lot of talk about the fact that the number of Cabinet appointees were much higher in the…

Dean Heller
Sen. Dean HellerR-NV · Feb 6, 2017

Madam President, I want to take a few moments to discuss an issue, one that is on everybody's mind; that is, the status of ObamaCare. Congress has taken the first step to repeal ObamaCare. I was in…

Show 1 more
Rob Portman
Sen. Rob PortmanR-OH · Feb 6, 2017

Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Bill Text

Latest available legislative text

Reading Mode
Latest
Introduced in SenateIssued January 9, 2017

II

115th CONGRESS

1st Session

S. 58

IN THE SENATE OF THE UNITED STATES

January 9, 2017

Mr. Heller (for himself and Mr. Heinrich) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to repeal the excise tax on high cost employer-sponsored health coverage.

1.

Short title

This Act may be cited as the Middle Class Health Benefits Tax Repeal Act of 2017.

2.

Repeal of excise tax on high cost employer-sponsored health coverage

(a)

In general

Chapter 43 of the Internal Revenue Code of 1986 is amended by striking section 4980I.

(b)

Conforming amendment

Section 6051 of such Code is amended—

(1)

in paragraph (14) of subsection (a), by striking section 4980I(d)(1) and inserting subsection (g), and

(2)

by adding at the end the following:

(g)

Applicable Employer-Sponsored Coverage

For purposes of subsection (a)(14)—

(1)

In general

The term applicable employer-sponsored coverage means, with respect to any employee, coverage under any group health plan made available to the employee by an employer which is excludable from the employee’s gross income under section 106, or would be so excludable if it were employer-provided coverage (within the meaning of such section 106).

(2)

Exceptions

The term applicable employer-sponsored coverage shall not include—

(A)

any coverage (whether through insurance or otherwise) described in section 9832(c)(1) (other than subparagraph (G) thereof) or for long-term care, or

(B)

any coverage under a separate policy, certificate, or contract of insurance which provides benefits substantially all of which are for treatment of the mouth (including any organ or structure within the mouth) or for treatment of the eye, or

(C)

any coverage described in section 9832(c)(3) the payment for which is not excludable from gross income and for which a deduction under section 162(l) is not allowable.

(3)

Coverage includes employee paid portion

Coverage shall be treated as applicable employer-sponsored coverage without regard to whether the employer or employee pays for the coverage.

(4)

Governmental plans included

Applicable employer-sponsored coverage shall include coverage under any group health plan established and maintained primarily for its civilian employees by the Government of the United States, by the government of any State or political subdivision thereof, or by any agency or instrumentality of any such government.

(5)

Cost of coverage

(A)

Health FSAs

In the case of applicable employer-sponsored coverage consisting of coverage under a flexible spending arrangement (as defined in section 106(c)(2)), the cost of the coverage shall be equal to the amount determined under rules similar to the rules of section 4980B(f)(4) with respect to any reimbursement under the arrangement reduced by the contributions described in subsection (a)(14)(B).

(B)

Archer MSAs and HSAs

In the case of applicable employer-sponsored coverage consisting of coverage under an arrangement under which the employer makes contributions described in subsection (b) or (d) of section 106, the cost of the coverage shall be equal to the amount of employer contributions under the arrangement.

(C)

Allocation on a monthly basis

If cost is determined on other than a monthly basis, the cost shall be allocated to months in a taxable period on such basis as the Secretary may prescribe.

.

(c)

Clerical amendment

The table of sections for chapter 43 of such Code is amended by striking the item relating to section 4980I.

(d)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2017.