Business Roundtable is an association of chief executive officers of leading U.S. companies working to promote a thriving economy and expanded opportunity for all Americans through sound public policy.
More Time to Get Health Care Right
Congress took an important step for employees and employers alike with its passing of an omnibus spending bill and tax extenders legislation. With a suspension of the 40 percent tax on high-value health care benefit plans, the House and Senate prevented the higher costs and more limited benefits that this so-called Cadillac tax would have caused.
Business Roundtable is a member of the National Coalition on Benefits, which represents businesses and employer associations. Last week the Coalition sent a letter to Speaker of the House Paul Ryan (R-WI) and Senate Majority Leader Mitch McConnell (R-KY) citing three negative consequences had the tax gone into effect:
- The broad application of this tax means that, over time, the health benefits of all U.S. employers will be subject to the tax, resulting in a distortion of the employer-sponsored health care marketplace that will lead to dramatic reductions in the level and richness of benefits offered to employees;
- The estimated job losses from implementing this tax could total 2.6 million by 2035; and
- It is also estimated that the economic impact of this tax will be significant as it would result in a 1.7 percent reduction in GDP by 2035.
The final package that passed the House and Senate with overwhelming, bipartisan margins made other important changes to provisions that were supposed to go into effect under the Affordable Care Act: It delayed the medical device tax that would have disadvantaged a highly competitive and innovative U.S. industry. In addition, the legislation placed a moratorium on the health insurance premium tax.
As Business Roundtable President John Engler observed: “Congress and the Administration will now have the time to work to preserve critical reforms made by employers before the Affordable Care Act was ever passed. These benefits, like wellness programs, need to be protected for millions of employees who have come to rely on them.”