Congress Delays ACA Excise Tax on Health Plans

Congress has decided to defer, until 2020, an excise tax on many employer health plans that will have a significant impact on middle-class workers.

Following a groundswell of opposition led by the IAM and other labor organizations, members from both houses of Congress have delayed the tax’s implementation. The year-end budget deal struck by Democrats and Republicans didn’t repeal the so-called Cadillac tax but it does raise doubt about whether it will ever take effect.

Originally scheduled to go into effect in 2018, the Affordable Care Act’s 40 percent excise tax would be imposed upon many of the employer-provided insurance plans IAM members have negotiated into their contracts. The tax affects plans with coverage costs exceeding $10,200 for individuals and $27,500 for families.

The tax would additionally impact working families because its rate is linked to inflation. Insurance premiums have been growing more rapidly than inflation, which means that more health plans would soon fall under the tax rules.

The IAM strongly opposes the tax and will continue to support its repeal.