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House passes repeal of excise tax on high-cost employer-sponsored health coverage (“Cadillac tax”)

House passes “Cadillac tax”

The U.S. House of Representatives today passed, xxx to yyy, H.R. 748, the “Middle Class Health Benefits Tax Repeal Act of 2019,” a bill to repeal the excise tax under section 4980I on high-cost employer-sponsored health coverage (commonly referred to as the “Cadillac tax”).

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Read the statutory language of H.R. 748.

The bill was considered under suspension of the rules, an expedited procedure that requires a two-thirds majority for passage.


Background

The excise tax under section 4980I was enacted as part of the Affordable Care Act to apply to “expensive” health care and related expenses paid for by employers. The excise tax rate is 40% for such health care coverage. The excise tax is currently scheduled to apply beginning in 2022. Originally scheduled to take effect in 2018, the implementation of the tax has been delayed twice, most recently in the “Extension of Continuing Appropriations Act of 2018.”


H.R. 748

H.R. 748 was considered by the House after being placed on the “Consensus Calendar.” Previously, Rep. Joe Courtney (D-CT) filed a motion to place the bill on that calendar, which can be used to move legislation to the House floor that has accumulated at least 290 cosponsors and that has not been reported by the primary committee of jurisdiction.


Revenue estimate

The Joint Committee on Taxation (JCT) today released a revenue estimate for H.R. 748: JCX-38-19

According to the JCT, repeal would have a revenue cost of approximately $197 billion over 10 years.  The bill does not include any revenue offsets


What’s next?

It is not clear whether or when the Senate might consider H.R. 748.

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