WASHINGTON, D.C., Sept. 17, 2015 — The Independent Insurance Agents & Brokers of America (IIABA or the Big “I”) today expressed its support for Senate legislation which would repeal the Affordable Care Act’s (ACA’s) 40% excise tax or “Cadillac tax.” Sens. Dean Heller (R-Nevada) and Martin Heinrich (D-New Mexico) are the legislation’s lead sponsors.
“As the country’s oldest and largest national association of independent insurance agents representing more than a quarter million agents, brokers and their employees, the Big ‘I’ is greatly concerned about the impact of the ACA’s 40% excise tax,” says Charles E. Symington, Big “I” senior vice president for external and government affairs. “This harmful 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 destructive tax and looks forward to working with Sen. Heller, Sen. Heinrich and the rest of Congress 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” is strongly supportive of this bipartisan legislation to repeal the tax.
“The Big ’I’ is grateful to Sens. Heller and Heinrich for introducing this critical legislation in the Senate,” says Wyatt Stewart, Big “I” director of federal government affairs. “Enactment of this legislation is imperative to helping middle class employees across the country keep the employer-sponsored health benefits they currently have.”
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 250,000 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