Full repeal versus compromise…..
Longtime opponents of the ObamaCare “Cadillac tax” met with lawmakers this week with a new message: We’re willing to compromise.
In a fly-in visit with key members and committee staff, employer benefits lobbyists went in seeking a more politically viable solution than full repeal.
Rather than eliminating the tax entirely, they pitched exempting the contributions that are made to employers’ health savings accounts, which could otherwise be subject to the 40 percent excise tax.
The new strategy is taking shape in a presidential election cycle in which every major candidate from both parties has pledged to repeal the tax — something the Obama administration is firmly against.
“I think that while there is an overwhelming agreement that something must be done on the Cadillac tax, there is also the political reality that full repeal is going to be very difficult to do,” said Bill Sweetnam, legislative director for the Employers Council on Flexible Compensation (ECFC).
“There’s a political aspect in this that I don’t think we’ll be able to get over in the short term,” he said.
Sweetnam’s group is asking lawmakers to allow personal accounts, such as Flexible Spending Accounts (FSAs) and Health Spending Accounts (HSAs), to be excluded from the insurance excise tax. Unless that happens, he warns that those accounts — which allow people to save tax-free — will cease to exist.
“What we’ve been telling people, if you don’t do something with health savings accounts and FSAs, employers are going to start dropping them,” he said.
So far, Sweetnam said he’s gotten no promises from lawmakers about introducing a bill, but he believes “a lot of people are looking at this as something to put in their back pocket.”
For now, many of the tax’s opponents in Congress are waiting on the GOP’s legislative package repealing major pieces of ObamaCare — including the Cadillac tax — that’s expected to reach the president’s desk this year.
While the bill is sure to be vetoed, Sweetnam and others say work on the bill is at least a step forward.
The language repealing the Cadillac tax in the reconciliation bill was written by Rep. Joe Courtney (Conn.), who has been a leading Democratic voice against the tax since 2009.
“There’s a lot of people like myself who voted for the law, but are prepared to perform surgery to eliminate this tax,” Courtney said. “It’s not going to fall into the camp of a lot of other repeal ObamaCare measures where the two parties have just gone to their respective corners.”
The Cadillac tax split lawmakers and economists from the earliest days of work on the Affordable Care Act (ACA), and is remained a sticking point through the end.
Back in 2009, the tax was the target of an intense lobbying campaign led by the unlikely bedfellows of AFL-CIO and the U.S. Chamber of Commerce. Shortly before final passage, a group of 173 House Democrats — including Courtney — wrote to then-House Majority Leader Nancy Pelosi opposing the tax.