WASHINGTON, D.C., Jan. 10, 2017—The Independent Insurance Agents & Brokers of America (IIABA or the Big “I”) today expresses its support for U.S. Senate and House of Representatives legislation which would repeal the Affordable Care Act’s (ACA) 40% excise tax or “Cadillac tax.” Sens. Dean Heller (R-Nevada) and Martin Heinrich (D-New Mexico) are the lead sponsors of S. 58 in the Senate while Reps. Mike Kelly (R-Pennsylvania) and Joe Courtney (D-Connecticut) are the lead House sponsors of H.R. 173.
“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 2020, 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. It is imperative that Congress protect the employer sponsored healthcare system for the 175 million Americans that depend on it. The Big ‘I’ fully supports repealing this destructive tax and looks forward to working with Sen. Heller, Sen. Heinrich, Rep. Kelly, Rep. Courtney and the rest of Congress to ensure this tax never sees the light of day.”
In 2015 Congress acknowledged the problems with the “Cadillac tax” and passed legislation to delay the tax two years until 2020. Now, starting in 2020, the ACA will impose a 40% tax on health benefits that exceed an established annual cost. That year, health plans exceeding $10,800 a year in value for individuals or $29,100 a year for families will be subject to this 40% tax. In the future, this tax will impact a greater number of individuals as health care costs rise at a faster pace than the measure of inflation tied to the tax. 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 legislation to repeal this tax.
“The Big ’I’ is grateful to Sen. Heller, Sen. Heinrich, Rep. Kelly and Rep. Courtney for introducing this critical legislation in the Senate and House,” says Wyatt Stewart, Big “I” senior director of federal government affairs. “Enactment of this legislation is imperative to helping middle class employees across the country keep their current employer-sponsored health benefits.”
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 approximately a quarter of million 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.