Repeal the 40% "Cadillac Tax" on Health Benefits

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What They Are Saying

Note: Names in purple have a hyperlink to the original source of the quote. Names in green are quotes obtained by the Alliance to Fight the 40.


"My legislation will protect workers from facing this devastating tax increase, employers from reducing workers’ benefits and municipal taxpayers who — if enacted — would experience skyrocketing property taxes. The repeal of this onerous tax has received widespread support from republicans, democrats, national unions and more."
Rep. Frank Guinta (R-NH)


"The excise tax is a poorly designed penalty that will put a dent in the pocketbooks of many families and businesses with health insurance plans that do not resemble the 'Cadillac' plans originally targeted when this policy was adopted—instead, the excise tax will punish people living in higher cost areas, with 'Ford Focus' level plans."
Rep. Joe Courtney (D-CT)


"This tax endangers and will deteriorate health benefits for American workers and their families. It will hit a broad spectrum of plans, not just those with very rich benefits. It also reduces incentives for employers to establish savings vehicles that make it easier for employees to pay for their health care and save for retirement. The ultimate result of this tax will be to reduce coverage and benefits to workers across the country in a variety of professions. We know that is not the goal of the Affordable Care Act, so it is incumbent on Congress to repeal this tax."
Matt Manders, President U.S. Markets & Global Health Care Operations, Cigna


"FEHB [Federal Employees Health Benefits Program] is one of the premier benefits the government uses to recruit individuals to the Federal workforce. As currently described in Notice 2015-16, and without relief, the administration of the excise tax will most likely require a reduction in FEHBP benefits and elimination of other benefit programs. This will impact the lives of current enrollees and will affect the ability of agencies to recruit and retain a world class workforce."
United States Office of Personnel Management


"Good health insurance is crucial for hospitality workers to have even the faintest hope for a middle class life. The 40% health benefits tax will tax low-wage workers out of the middle class. It must be repealed."
D. Taylor, President, UNITE HERE


"All electric cooperatives in the United States could be subject to this 40% tax; not because we have 'Gold-Plated Cadillac Plans,' but because our employees live in rural communities where limited access makes the cost of that health care disproportionately higher than in urban areas. No co-op, whether they provide health insurance through NRECA's Group Benefits Trust or from another source, should be penalized for 'doing the right thing' for their employees."
Jo Ann Emerson, CEO, National Rural Electric Cooperative Association


"This tax strikes at the heart of the employer sponsored health care system, which provides coverage today to over 150 million Americans. Employers have worked hard to provide efficient, affordable, quality health care to their plan participants. As currently structured, the excise tax discourages innovation by penalizing employers for using tools to control costs and improve the health of their workforce — from on-site medical clinics to employee wellness programs and other initiatives."
Kate Hull, Executive Director, Corporate Health Care Coalition


"As the nation's 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. 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 Forty to ensure this tax never sees the light of day."
Robert Rusbuldt, President &CEO, Independent Insurance Agents & Brokers of America


"LIUNA has joined with like-minded groups to support a repeal of the 40 percent benefits tax to protect the health care that working Americans depend on. The 40 percent benefits tax in the ACA punishes responsible employers and workers and will result in families being wrongly forced to bear the unfair burden as costs are shifted to avoid the excise tax. Congress needs to act for the sake of working families and immediately repeal this regressive and unfair tax."
Terry O'Sullivan, General President, LIUNA


"While we appreciate the intent behind the 40% tax, it will affect far more health plans — even over the near term — than we think appropriate, and intensify the complex ACA reporting obligations with which our clients and other employers are already laboring."
Robert Reiff, President, Lockton Benefit Group


"The 40% Excise tax has no upside — not only does it not actually identify plans with 'Cadillac'-type benefits, but is structured in such a way that many employers, from the smallest Mom and Pop to the largest corporation may have to reconsider their ability to offer coverage to employees at all. Those that do continue to offer coverage will be forced to drastically reduce benefits. These actions hurt the very middle class families the ACA was designed to protect, and something has to be done now to prevent this from happening."
Janet Trautwein, CEO, National Association of Health Underwriters.


"Willis fully supports the efforts of the Fight the 40 Alliance on behalf of its human capital and employee benefit clients. The 40% excise tax is intended to discourage employers from offering rich, gold-plated health benefits on a tax advantaged basis that may generate overconsumption of health care. However, the excise tax, as passed, will eventually impact ALL employer plans for ALL employees. Organizations are being forced to revise their plans and reduce their benefits to avoid this significant and punitive tax. As result, rather than encourage employers to offer robust, substantial levels of health insurance coverage, the tax will ultimately encourage less meaningful coverage and more expensive coverage for those employees."
Jay M. Kirschbaum, National Legal and Research Group, Human Capital Practice, Willis


"Companies and benefits professionals are already preparing for the 40% tax on health insurance plans. This tax is a significant threat to the total rewards strategies companies utilize to attract, motivate, retain and engage employees. If it is not repealed, many companies will be forced to significantly change their health care offerings, and the value of the total rewards employers can offer to their employees will diminish. WorldatWork urges Congress to repeal this severe tax on employee benefits."
Cara Woodson Welch, WorldatWork VP of External Affairs and Practice Leadership


"The 40% tax is inherently unfair because it penalizes our Company for costs that are beyond our ability to control. Also, the 40% tax undermines our ability to provide comprehensive health and wellness programs for our employees."
Bernard Peloquin, Director, Benefits and HR Operations, Eversource Energy


"Counties must be able to continue to offer competitive health benefits to county employees who serve more than 300 million residents nationwide. Not only would the excise tax hinder our efforts to attract and retain quality employees, but it would also have significant impacts on county budgets and place additional burdens on taxpayers."
Sallie Clark, President, National Association of Counties


"Millions of school teachers, custodians, cafeteria workers, and teachers' aides don't drive Cadillacs—but are on the verge of being hit with the Cadillac Tax. Our school district is on a fixed budget—we cannot cover the additional costs of this tax. Our only options are to pass it along to our staff, reduce health benefits, or cut back educational programming for the children. We must stop this unfair tax now, to ensure that our hardworking education professionals continue to have access to the health benefits they have worked so hard for."
Brian Marshall, Superintendent, La Mesa-Spring Valley School District


"We've wanted to repeal it since it was passed. We're all ready. All the taxes in Obamacare are destructive, so anything we can do in the direction of repealing is a wise idea."
Rep. Tom Price (R-Ga.), chairman, House Budget Committee


"Employers will do what they need to do to stay under that threshold."
Larry Merlo, chief executive, CVS Health


"The issue of this tax is there; There will be a push for more employee contributions. No one likes it; The Cadillac tax does not benefit the employer or employee. It's just money that goes straight to the federal government."
Jeffery S. Ammerman, director of technical assistance, Pennsylvania Association of School Business Officials


"We initially set out to prove that HSA plans would steer clear of the tax, but were dismayed to find some plans will be hit right away if payroll contributions are counted. While many HSA plans will likely be a safe haven for now, like the AMT, this tax will eventually affect every plan in America, including HSA plans."
Todd Berkley, president, HSA Consulting Services


The excise tax is a "built-in revenue generator for the government that entraps more and more plans over time. It doesn't help the employer, the employee, the customer, or the shareholder... Surveys consistently show that employees highly value their employer-provided coverage. Right now, it's still the best deal in town and changing the tax status could jeopardize it - with no stable long-term alternative source of coverage yet on the horizon."
Steve Wojcik, vice president of public policy, National Business Group on Health


"Health benefits have historically grown at rates more than double that of inflation. If the 'Cadillac tax' threshold rises at rates adjusted for inflation, then over time more and more plans could be subject to the tax."
Devon M. Herrick, Ph.D, senior fellow and health economist, National Center for Policy Analysis


"Employers are coming to the table asking for cuts in benefits based on their preliminary projections around the tax."
Shaun O'Brien, assistant policy director for health and retirement, AFL-CIO


"'Cadillac tax' is really a misnomer. Potentially any employer could be hit by this tax."
Beth Umland, director of research for health and benefits, Mercer


"[The tax] was sold as being on 'Cadillac Coverage.' The idea was that there were some people out there that are getting thousands and thousands of dollars' worth health insurance premiums. But the reality is that health insurance premiums can be expensive for many different reasons, not just because they have generous coverage... It was sold as a way to tax quote-un-quote Cadillac plans, and it's not a particularly well-designed tool to do that. What you're doing is you're putting people into less comprehensive health plans. The burden winds up being borne [by] those people who actually need to consume health care."
Elise Gould, director of health policy research at the Economic Policy Institute


"For employers already working to comply with a myriad of new taxes, penalties, and mandates, the cost of the 40 % excise tax will leave many businesses with few options. Accordingly, the cumulative effect of these new taxes and fees is hindered economic growth and job creation. For both fully-insured and self-insured plans, much of the cost will have to be passed on directly to plan participants in the form of increased contributions and premiums."
Bruce Josten, executive vice president, U.S. Chamber of Commerce


Because the tax will eventually hit lower-cost plans at a very steep progression, "We would support repealing the tax."
Neil Trautwein, National Retail Federation


"Even a Chevy may be affected by the Cadillac Tax. For most employers, the excise tax will be a question of when, not if, unless action is taken. The ACA has put a timer on cost management for many employers, and unless one cuts benefits or improves program performance there's a real risk of triggering it."
Randall Abbott, senior health strategist, Towers Watson


"Local governments should be very concerned about running afoul of the [40% excise] tax. In 2014, government health care plans were 17.5 % higher cost than the average citizen's plan, and their employee contributions were 45 % less than the average plan... If these patterns continue, many state and city health care plans will run up against the tax in 2018 ... if health care costs of local governments continue to rise and they start paying the tax, the combination will jeopardize public spending on essential services like schools and police."
Robert Pozen, senior lecturer at the Harvard Business School and a Senior Fellow in Economic Studies at the Brookings Institution


"Businesses have been pushing their workers out of high-cost plans and into ones with higher deductibles while simultaneously offering them HSAs to help them cope with the increased costs. Many employers are also considering significantly cutting how much they subsidize the health benefits of spouses or dependents of workers."
Ronnell Nolan, President, Health Agents for America


The excise tax "will have a huge negative impact on middle-income Americans. If this provision in the ACA isn't changed, it will have a devastating snowball effect over time."
Charles Symington, senior vice president of external and government affairs, Big "I"


The effect of the excise tax "is ironic, because the point of the Affordable Care Act was to expand coverage to the 30 million people who don't have it. But a byproduct of that is that the employer-sponsored plans just aren't going to be as good as they once were."
Tracy Watts, senior partner, Mercer


"The health care excise tax set to take effect in 2018 is an onerous charge that will hit many middle-class families hard in the pocketbook, all because their health insurance is considered too good. It is unconscionable that some hardworking Americans will have to pay a 40 percent penalty on benefits they've fought hard to receive."
Teamsters General President Jim Hoffa