In a rare moment of bipartisan unity, the U.S. House of Representatives voted to repeal the Obamacare “Cadillac Tax,” moving us one step closer to removing a costly threat to affordable health insurance for small business owners.
Obamacare included the 40 percent excise tax – often referred to as the Cadillac Tax – to discourage generous employer-sponsored plans. This tax was meant to lower health insurance costs, but the tax – scheduled to go into effect in 2022 – would end up burdening businesses and limiting consumer choice.
NFIB continues to push for greater freedom and competition in our health care system, and eliminating the Cadillac Tax is one element of that push. NFIB made H.R. 748, the Middle Class Health Benefits Tax Repeal Act of 2019 a Key Vote for the 116th Congress. This distinction put House members on notice that their vote would be included in future NFIB scorecards. They knew the small business community would be watching.
Health insurance costs remain the leading problem for small business owners, according to NFIB’s Small Business Problems and Priorities survey. High health insurance costs make it difficult for small businesses to offer coverage for their employees and purchase coverage for themselves. That makes it harder to attract and retain qualified workers. In the years since Obamacare became law, the number of small businesses offering health insurance dropped from 39 percent in 2010 to fewer than 30 percent in 2018. Imposing the Cadillac Tax would only make things worse.
NFIB urges Congress to wipe out this tax because it creates an administrative nightmare for small business owners already saddled with unnecessary paperwork. They don’t have the time or resources to deal with yet more compliance concerns.
For the repeal to become law, eliminating the threat of the Cadillac Tax for good, the Senate will have to enact its version of the House-passed bill, S. 684, and President Trump must sign the bill. NFIB strongly supports these efforts to repeal the Cadillac Tax and eliminate a looming threat to employer-sponsored health insurance.