House Ways and Means Committee Chairman Kevin Brady (R-Texas) on Wednesday gave a nod of approval to a proposal about Obamacare’s Cadillac tax in the White House’s 2017 budget.
“While we will disagree more than we agree today, I do believe that there are some important areas of cooperation. I’m glad that the White House has finally faced reality in one area and agreed that the so-called Cadillac tax is not workable,” Brady said during a hearing on the proposed budget.
Many contractors who provide farm labor and must now offer workers health insurance are complaining loudly about the cost in their already low-margin business.
Some are also concerned that the forms they must file with the federal government under the Affordable Care Act will bring immigration problems to the fore. About half of the farm labor workforce in the U.S. is undocumented.
“There’s definitely going to be some repercussions to it,” said Jesse Sandoval, a farm labor contractor based in Stockton, California. “I think there’s going to be some things that cannot be ignored.”
President Barack Obama is having a tough time winning friends for his Cadillac tax.
His plan to dial back the unpopular ObamaCare tax on high-cost health plans, to be detailed in the fiscal 2017 budget he’ll release Feb. 9, has won him no applause from employers, labor unions or health insurers. The tax still must be repealed, they say, not merely modified.
“The ‘Cadillac tax’ cannot be fixed,” James Klein, president of the American Benefits Council, a nonprofit representing employers, said in a statement. “We’re glad the administration recognizes the ‘Cadillac tax’ is seriously flawed. But its impact in high cost areas is just one of its many problems.”
he Cadillac tax was apt to be politically unpopular. It was particularly apt to be unpopular with politically active groups, such as unions. It therefore seemed somewhat unlikely to us that the Cadillac tax would ever be actually allowed to take effect. Don’t be alarmist, we were told; the administration knows that all the parts of this law hang together. It will not start disassembling the complicated structure it spent so much time and political capital putting together.
And to be sure, the administration has not capitulated in the face of considerable political pressure. Well, it has not capitulated much. The White House did agree to push the implementation date back to 2020 from 2018. That ObamaCare’s principle architects want to be safely away from 1600 Pennsylvania Avenue before the Cadillac tax is implemented gives you a pretty good idea of how politically viable it is.
The House is expected to vote in the coming week on legislation to roll back some menu labeling requirements of the Affordable Care Act.
The Common Sense Nutrition Disclosure Act, introduced by Reps. Cathy McMorris Rodgers (R-Wash.) and Loretta Sanchez (D-Calif.), would exempt most grocery stores, convenience stores, gas stations and movie theaters from having to provide calorie counts for prepared food items.
The House bill would only apply the nutrition rule to establishments that derive more than 50% of their total revenue from the sale of food.
As more requirements of the health care law take effect, income tax filing season becomes more complex for small businesses.
Companies required to offer health insurance have new forms to complete providing details of their coverage. Owners whose payrolls have hovered around the threshold where insurance is mandatory need to be sure their coverage — if they offered it last year — was sufficient to avoid penalties.
Even the most tax-savvy owners may find that do-it-yourself doesn’t work when it comes to fulfilling the law’s requirements. Many don’t know about the intricacies of the new health care regulations associated with the law that affect employers, says Lydia Glatz, an accountant with the firm MBAF in Fort Lauderdale, Florida.
“Most small businesses and mom-and-pop operations,” Glatz says. “They’re more involved in running their day-to-day business.”
President Barack Obama will propose reducing the bite of the unpopular “Cadillac tax” on high-cost health insurance plans in the budget he releases next week, in a bid to preserve a key element of the Affordable Care Act.
Jason Furman, the White House Council of Economic Advisers chairman, wrote in the New England Journal of Medicine that the president’s plan would reflect regional differences in the cost of health care, reducing the tax’s bite where care is particularly expensive.
“This policy prevents the tax from creating unintended burdens for firms located in areas where health care is particularly expensive, while ensuring that the policy remains targeted at overly generous plans over the long term,” Furman wrote in the Journal article.
There is little congressional appetite to revisit ObamaCare’s Cadillac tax in an election year, but that’s not stopping the coalition opposing it from campaigning about it.
Fight the 40, the coalition that includes unions and Fortune 500 companies as members, is still pushing for a full repeal of the 40 percent excise tax on employer-sponsored health benefits above a certain threshold. The tax was originally scheduled to go into effect in 2018 but was pushed back two more years in December.
“We will continue our work to highlight how the tax creates age, gender, and geographic disparities and how it impacts vulnerable demographics,” the group said in a memo shared first with Morning Consult.
Two studies published in the most recent Health Affairs journal raise questions about the contention that the Affordable Care Act will reduce employment, wages, and hours worked by employees.
The study by Gooptu and colleagues examined the effects of the law’s Medicaid expansion on employment and found no statistically significant effect through March 2015. A related study by Moriya and colleagues examined the subsidy structure provided to households getting health insurance through the ACA’s exchanges and similarly found no discernible effect on levels of part-time employment for employees eligible for these subsidies.
These studies provide useful new information, but they do not mean, as some reporting on them seems to suggest, that there is nothing to worry about with respect to the ACA’s effects on labor markets. Given the structure of the ACA, it would be hard to conclude the law would not eventually reduce hours worked or total compensation, although the magnitude of the resulting changes may be hard to detect in the U.S.’s large and complex labor markets.
The Affordable Care Act was signed into law nearly six years ago. Since that time, 106 regulations have been finalized to implement the ACA. These regulations will cost businesses and individuals more than $45 billion and will require approximately 165 million hours of paperwork in order to comply.
In addition to these regulations, hundreds of guidance documents regarding the ACA have been published by various federal agencies during this time as well. However, more regulations—and additional costs—are still to come.