Capitol Hill Update: SMACNA Supports House Bill to Repeal "Cadillac Tax" on Health Care Benefits

SMACNA supports the bipartisan legislation, “The Middle Class Health Benefits Tax Repeal Act of 2019,” H.R. 748, which was recently referred to the House by the House Ways and Means Committee.

The House bill would repeal an impending 40 percent tax on employer-provided health care coverage. The legislation is co-sponsored by Reps. Joe Courtney (D-2nd-Connecticuit) and Mike Kelly (R-16th-Pennsylvania), along with seven bipartisan co-sponsors.

SMACNA has long expressed its viewpoint and experience in the health care policy arena that imposing excessive taxes on its member companies is counterproductive to the goal of providing employee health care.  SMACNA firms are standout employers who support their employees and their families by providing vital health care benefits. Simply put, the excise tax on employer provided health care unfairly penalizes companies that invest in their employees.

This so-called “Cadillac tax” grants a distorted market advantage to employers who provide no or substandard health coverage to the employees. Historically, health insurance benefits have not been treated as income for employees. This allows companies to provide lower-cost and better health coverage to their employees.

In letters to members of Congress, SMACNA emphasized that its member employers, who are leaders in the construction industry, provide responsible, quality health coverage to their employees through multiemployer health plans.

SMACNA contractors have consistently provided more affordable and better health insurance to their employees for decades, SMACNA’s legislative staff emphasized in the letter to members of Congress. Many Americans depend on health coverage that SMACNA members provide for acute and chronic illnesses. Taxing those benefits would be short-sighted and irresponsible, and would cause hard-working, blue collar Americans to lose high-quality employer-provided health benefits.

Legislative Status of the Cadillac Tax

This House legislation currently has 345 co-sponsors, significantly more than the 218 needed to pass legislation in the House.

In addition, a bipartisan Senate companion bill, S. 684, was recently introduced by Sen. Martin Heinrich (D-New Mexico) and Sen. Mike Rounds (R-South Dakota). The Senate bill currently has 35 co-sponsors.

Congress has twice delayed the implementation of this tax. In both chambers, both laws, H.R. 748 and S. 684, would repeal the tax all together.

SMACNA applauds Rep. Courtney’s leadership in advancing the bill to the House and his efforts to repeal the excise tax on premium employer-sponsored health coverage plans. As a leader on the House Ways and Means Committee, Rep. Courtney supports the tax incentives necessary for businesses to provide their employees with quality health care.

To support these bills, SMACNA members are urged to contact their legislators on SMACNA’s Take Action web page.