On December 10, House Republicans released a broad package of tax provisions (H.R. 88) that includes a provision to delay the implementation of the 40 percent excise tax on employer-sponsored health insurance until 2022. The tax, also referred to as the Cadillac Tax, was originally included in the Patient Protection and Affordable Care Act (ACA) passed in 2010. However, the Cadillac Tax implementation date has repeatedly been delayed, and is currently set to take effect in 2020.
Counties employee more than 3.6 million workers, with healthcare coverage serving as one of the primary benefits counties use to attract and maintain a quality workforce. If the excise tax on employer-sponsored health insurance is implemented, county budgets and workforce development could see a significant impact.
Outlook for passage of the proposal remains muddled, as Democrats have voiced opposition to other parts of the tax package. Congress must also address many other pressing issues, including government funding, the Farm Bill, and potentially criminal justice reform, prior to the end of the 115th Congress. NACo supports a full and permanent repeal of the excise tax and will continue working with our congressional champions to achieve this goal.