Dear Member of Congress,
On behalf of The ERISA Industry Committee (ERIC), we write today to urge you to support the upcoming Continuing Resolution (CR) to keep the government funded, fund the Children’s Health Insurance Program (CHIP), and provide relief from several damaging taxes created by the Affordable Care Act (ACA). ERIC’s top priority is eliminating the 40 percent “Cadillac” excise tax on employer-sponsored health insurance, and because this legislation includes a 2-year reprieve from the tax, we urge you to vote “yes” when the CR comes to a vote.
ERIC is the only national association that advocates exclusively for large employers on health, retirement, and compensation public policies at the federal, state, and local levels. We advocate for policies that empower employers to offer quality benefits to working families, and help control the costs of health insurance and health care services. The Cadillac tax poses an existential threat to employer-sponsored health benefits, and will be destructive for employers, employees, retirees, and the taxpayers. If the Cadillac tax is not delayed as soon as possible, employers who are preparing for the 2020 plan year will be forced to make a number of unfortunate changes, including:
- Increasingly shifting costs to plan beneficiaries in the form of higher premiums, higher copays and coinsurance, and higher deductibles;
- Reduce or eliminate employer contributions to Health Savings Accounts (HSAs) and other consumer- directed accounts;
- Reduce access to various providers and create more narrow networks;
- Eliminate coverage for some beneficiaries and certain benefits; and
- Eliminate investments in health such as telehealth options, wellness programs, health information technology, onsite clinics, and other up-front investments that improve health later.
Employee benefits are designed, negotiated, contracted, and rolled out long before the actual plan year begins; as such, the January 1st, 2020 implementation date for the Cadillac tax looms large upon employers. The goal of full repeal of the Cadillac tax is within reach, now that more than half of the House has sponsored the Middle Class Health Benefits Tax Repeal Act (H.R. 173), and the Senate voted last year to completely eliminate the Cadillac tax. However, immediate relief is needed, and the 2-year delay contained in the CR is the right step forward.
As such, we urge you to vote in favor of the CR, to provide relief to employers, workers, families, retirees, and everyone who will be adversely affected by the Cadillac tax.
Senior Vice President, Health Policy