Repealing The 40 Percent Excise Tax
Mr. Speaker, I rise for the working men and women in our country who have well-deserved, hard-earned quality healthcare benefits to urge House leadership to bring to the floor H.R. 748, the Middle Class Health Benefits Tax Repeal Act. This…
Mr. Speaker, I rise for the working men and women in our country who have well-deserved, hard-earned quality healthcare benefits to urge House leadership to bring to the floor H.R. 748, the Middle Class Health Benefits Tax Repeal Act. This bill would finally fully repeal the 40 percent excise tax on certain employer-sponsored healthcare plans. For too long, the tax has been a looming threat.
Make no mistake, this tax falls on everyday working families, including laborers, operating engineers, carpenters, pipefitters, painters, plumbers, ironworkers, transportation workers, firefighters, police, and many others, many who have fought for and won healthcare benefits in collective bargaining agreements.
Among its many unintended effects, this excise tax has helped encourage the recent large increases in insurance plan deductibles, which especially hurt those with chronic illnesses.
This repeal bill has been proposed for years. It is well past time to give it a vote on the House floor.
The 40 percent excise tax on high-quality healthcare plans was enacted in the 2010 Affordable Care Act. The ACA has had many good effects, but it also had many flaws as enacted. We need to make the ACA work better for more Americans. And one provision that needs to be fixed is this tax.
The tax was supposed to begin in 2018, but has been repeatedly delayed, reflecting the awareness of its negative impact. Right now, it is scheduled to take effect in 2022. It is time to just end it.
Regardless of the intent behind the original ACA provisions, the truth is that health insurance premiums have continued to grow faster than inflation, putting even plans with modern benefits at risk of getting taxed.
As Families USA recently pointed out, without a permanent solution, as many as one out of every four workers with job-based health plan coverage could be affected by this tax by 2025. That is just 6 short years from now.
Furthermore, responsible employers plan ahead and are already gearing up to plan their budgets for health insurance in the next few years. This is especially concerning in the case of workers who have successfully used their right to organize to reach collective bargaining agreements with their employers.
Good union jobs provide workers with a better opportunity to negotiate benefits that fairly reflect the important contributions they make to the American economy. Union jobs and union contracts mean workers are fairly compensated in the private sector without relying on taxpayers and the Federal Government.
But collective bargaining agreements often span years, and the looming threat of the excise tax puts these hard-fought contracts at risk. Temporary delays in the excise tax only create more fear and uncertainty for families as they wonder whether their benefits will be severely cut back due to heavy government taxes.
Delays also crimp employer budgets, as businesses are forced to account for the risk of getting hit with hefty charges. By undermining long-term collective bargaining agreements, these delays also undermine the bedrock of the American economy: fairly negotiated private contracts that all parties know they can rely on.
Mr. Speaker, the American people have shown us that they don't want repeal of the ACA and they don't want important protections to be ripped out from under them. They want the ACA fixed. So let's show them we are listening.
So, let's show them we are listening. Let's show them that workers with good, job-based health coverage will not have to fear it eroding simply due to government taxes. Let's bring the Middle Class Health Benefits Tax Repeal Act to the floor.