The House passed the repeal bill by a wide margin Wednesday afternoon.
The House of Representatives voted to repeal the 'Cadillac tax' provision of the Affordable Care Act (ACA) Wednesday afternoon.
In a bipartisan vote, the House approved the Middle Class Health Benefits Tax Repeal Act, sponsored by Rep. Joe Courtney, D-Conn.
The House bill has a companion bill in the Senate, sponsored by Sen. Martin Heinrich, D-N.M., though a vote has not been scheduled yet.
The bill repeals the 'Cadillac tax,' which applies a 40% excise tax on employer-sponsored health plans that offer excess benefits, which will take effect for taxable years beginning in 2020.
On Wednesday, the Congressional Budget Office released a cost estimate of the bill that projected the repeal would increase deficits by $197 billion over the next decade.
The statute had long earned the derision of not only ACA opponents, but employers as well, and in recent years, congressional leaders had pushed off its implementation from 2018 to 2022.
A Willis Towers Watson (WTW) survey released in May found that employers are increasingly more concerned with quality of care provided to employees than the cost savings when considering a high performance network.
Another WTW study released one month later indicated that nearly 60% of employers were unable to improve the employee care experience due to budget constraints.
Earlier this week, an analysis from the Kaiser Family Foundation (KFF) showed that 20% of employer-sponsored health plans, as well as 31% of health plans in general, would be affected by the 'Cadillac tax.'
The KFF study indicated that the threshold for the excise tax to be placed on high-cost employer-sponsored plans would be $11,200 for individual coverage and $30,100 for family coverage.
By 2030, KFF estimated that 37% of employers would be affected by the tax without flexible spending account (FSA) contributions and 46% with them.
Industry power players applauded the action taken by the House, with Matt Eyles, president of America's Health Insurance Plans (AHIP), calling the repeal a "bipartisan solution to bring down health care premiums and costs."
“Americans deserve access to high-quality, comprehensive coverage they can afford," Eyles said in a statement. "Permanently repealing this 40% excise tax would help reduce consumer costs through lower deductibles, improve health care access and make health care coverage more affordable for hundreds of millions of hardworking Americans."
He also called on Congress to repeal the health insurance tax, which Eyles said would increase premiums and financially harm seniors enrolled in Medicare Advantage plans.
The National Business Group on Health also applauded the repeal effort, with CEO Brian Marcotte saying it represented "welcome news for both employers and employees."
Editor's note: This story has been updated to include commentary from the National Business Group on Health.
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.
Photo credit: Brussels, Belgium. 18th Feb. 2019. President of the European Commission Jean-Claude Juncker meets with a Speaker of the United States House of Representatives Nancy Pelosi. - Image / Editorial credit: Alexandros Michailidis / Shutterstock.com