House Votes Overwhelmingly to Scrap ‘Cadillac Tax’ on Health Benefits

The House of Representatives voted 419-6 to repeal punitive taxes on many union health plans, a major win for union workers and a rare moment of bipartisanship in Washington.

Wednesday’s bipartisan vote to cancel the so-called Cadillac Tax has been one of the IBEW’s highest legislative priorities since it was included in the Affordable Care Act nearly a decade ago.

“This is a crucial vote for our members, but the job is only half done. With a margin that big, we believe Senate Republicans will come under tremendous pressure to give this bill an up-or-down vote,” said Political and Legislative Department Director Austin Keyser. “And we need members’ help in keeping the pressure on.”

The tax was sold as a way to hold down health care costs, lowering the cost of health care for everyone by putting a luxury tax on the platinum-plated health plans. But politicians kept lowering the threshold from platinum, to gold, to silver, to the kinds of plans negotiated by millions of union workers, which are luxurious only when compared to the truly mediocre health care foisted on nonunion workers.

Milliman, an independent actuarial firm, found that nearly 18 million workers would be subject to the excise tax in 2022. That number is expected to escalate to over 58 million Americans by 2029.

While the 40% tax has been delayed multiple times thanks to union opposition, that just created uncertainty at the bargaining table, Keyser said. The latest postponement was set to expire in 2022, now within the duration of three-year contracts being negotiated now.

“Some employers were starting to demand concessions in negotiations now to prepare for costs ballooning in the final year of the contract,” he said. “We appreciate the postponements, but even just the threat of implementation has a cost.”

The passage of HR 748, the Middle-Class Health Benefits Tax Repeal Act, is an important first step, one that comes only after worker-backed Democrats took over the House in January. Now the challenge is getting a similar bill through the Republican-controlled Senate and onto the President’s desk.

“We urge every member to call their Senator and force Sen. Mitch McConnell to bring this to a vote,” Keyser said. “Every day the Cadillac Tax is still a threat is a day that IBEW members are losing money.”

Find your Senators at www.senate.gov/senators/contact and tell them to support HR 748 and protect your hard-won health benefits.

 

 

 

 

 

 

 

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