Health Law & Policy
| Jan 31 2019

Employers Asked to Sign Letter to Support ‘Cadillac Tax’ Repeal

Tracy Watts
Senior Partner, National Leader for U.S. Health Policy
Geoff Manville
Partner, Mercer’s Law & Policy Group

Employers are being asked to sign on to a group letter to Congress supporting new bipartisan House legislation (HR 748) to repeal the ACA’s “Cadillac Tax” by the Alliance to Fight the 40, a broad-based coalition dedicated to ending the tax and preserving current incentives for employer-provided healthcare.  As a member of the Alliance and active participant in efforts to repeal the tax, Mercer will sign the letter and urges other stakeholder to the same. The Alliance will be collecting signatures until February 8th and will deliver it to Congress on February 11.

The Middle Class Health Benefits Tax Repeal Act of 2019 has already garnered 41 cosponsors; a similar House bill in the previous Congress drew support from more than 300 lawmakers but stalled over whether and how to offset the projected lost revenue.

Since enactment in 2010, Mercer surveys have shown that the tax has always been a top concern of employers. Moreover, our annual Survey of Employer-Sponsored Health Plans has demonstrated to policy makers that the tax is not triggered by rich benefits as much as it is by regional variations in cost and plan demographics. The is more likely to penalize, for example, plans that cover higher proportions of older workers, females, families, and part-time workers. And, there is relatively little difference in the actuarial value between plans that will reach the threshold and those who won’t.

Based on survey data, we estimate that about one-third of employers will be subject to the tax – if they make no changes to their current plans – if it goes into effect as scheduled in 2022, and that more than half of employers will hit the tax by 2027.

We will continue to work with the Alliance to prevent that from happening, however, and will continue to report on related developments. If your organization is interested in joining the Alliance to Fight the 40 or would like further information on signing the group letter please contact

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