Senator Lankford Co-Sponsors Legislation to Repeal the Cadillac Tax
WASHINGTON, DC – Senator James Lankford (R-OK) today co-sponsored The Middle Class Health Benefits Tax Repeal Act of 2015 to eliminate Obamacare’s High Cost Plan Excise Tax, also known as the “Cadillac Tax.” Beginning in 2018, employers will be hit with a 40 percent tax on employee health benefits insurance premiums exceeding $10,200 for individuals and $27,500 for families.
“Businesses and families have already endured enough failed promises and penalties from Obamacare,” said Lankford. “This bill, while it will not remove all mandates on companies and families, is one of the pieces of the puzzle to alleviate some of the heart burn that has resulted from the 2010 legislation. Businesses and families should not have to face a high tax because the President believes their insurance is ‘too good’. I’m glad to be able to stand with my colleagues to remove a tax that will have detrimental consequences on families and businesses.”
The tax was originally set to take effect in 2013, but was later amended to start in 2018. The tax will directly impact consumer-directed healthcare benefits like health savings accounts (HAS) and flexible spending arrangements (FSA) by treating every dollar as if paid by the employer, not saved by the employee. This will likely move employers to limit contributions to these accounts or eliminate the benefit. The excise tax could also impact the cost of health care coverage and discourage wellness, prevention or a decline in employers providing health care coverage.