WASHINGTON, D.C., July 28, 2015 — The Independent Insurance Agents & Brokers of America (IIABA or the Big “I”) joined with a diverse group of public and private sector employers, unions, and other health insurance stakeholders to announce the launch of “The Alliance to Fight the 40: Stop the 40% Tax on Health Benefits” (“Fight the 40”).
The Alliance is dedicated to repealing the 40% tax on employee health benefits (the so-called “Cadillac tax”) imposed by the Affordable Care Act to ensure that employer-sponsored health coverage remains a meaningful and affordable option for working Americans.
“As the country’s oldest and largest national association of independent insurance agents representing a network of more than a quarter million agents, brokers and their employees, the Big ‘I’ is greatly concerned about the impact of the Affordable Care Act’s 40% excise tax,” says Robert Rusbuldt, Big ’I’ president & CEO. “This pernicious tax will not only hit many of our small business members and their clients starting in 2018, but over time will impact more and more individuals because the tax threshold is tied to a very slow measure of inflation. This snowball effect will do irreparable damage to the employee benefits marketplace. The Big ‘I’ fully supports repealing this damaging tax and looks forward to working with the Alliance to Fight the 40 to ensure this tax never sees the light of day.”
Starting in 2018, the ACA will impose a 40% tax on health benefits that exceed an established annual cost. That year, health plans exceeding $10,200 a year in value for individuals or $27,500 a year for families will be subject to this 40% tax. In the future, this tax will impact a greater number of individuals while health care costs continue to rise.
According to a March survey by Mercer, a benefits consulting firm, about one-third of employers will face the tax in 2018 if they do nothing to change their plans. By 2022, almost 60% will face the levy. The Alliance to Fight the 40 predicts that this will lead to a reduction in employer-sponsored coverage and an increase in employee cost sharing – the exact opposite of the ACA’s stated goals. This will be harmful to middle-income Americans across the country. For these reasons, the Big “I” looks forward to working with the Alliance to Fight the 40 to repeal this damaging tax.
Founded in 1896, the Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, health, employee benefit plans and retirement products. Web address: www.independentagent.com.