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SC June News Repeal Excise Tax

    June 19, 2015


    On behalf of the State Council’s Legislative Director, James Reidy

    On June 3rd, HR State Council of NH, has signed our support to Repeal Excise Tax

    Dear Speaker Boehner and Minority Leader Pelosi:

    On behalf of over 275,000 Human Resource (HR) professionals of the Society for Human Resource Management (SHRM) and the ### undersigned SHRM Chapters and State Councils, we write in strong support of legislative proposals to repeal the excise tax on high value, employer-sponsored health coverage. Specifically, we urge all members of the House of Representatives to co-sponsor H.R. 2050, the Middle Class Health Benefits Tax Repeal Act of 2015 and H.R. 879, the Ax the Tax on Middle Class Americans' Health Plans Act.

    As you know beginning in 2018, the Affordable Care Act (ACA) will impose an excise tax otherwise known as the "Cadillac Tax" on health care plans that cost more than $10,200 a year for individuals and $27,500 a year for families (excluding stand-alone dental and vision plans). Under the ACA, those plans are set to be taxed at 40 percent of the cost above those limits and according to SHRM Research survey results released in March, 33 percent of respondent’s plans will be hit with the excise tax in 2018. Looking ahead, the percentage of employers subject to the excise tax is expected to rise significantly after 2018 as the tax is indexed to the Consumer Price Index (CPI), not health care cost inflation. As a result, although the excise tax was intended to target lavish health care plans, even modest plans covering working class and middle-income Americans will be subject to the excise tax.

    Although the excise tax is not effective until 2018, HR professionals and their organizations are already restructuring their employee health and benefit offerings to avoid the tax. In fact, according to the SHRM Research, 21 percent of respondents expect to decrease their health benefits offerings and 7 percent indicated a reduction in non-health benefits (such as financial benefits and compensation or retirement savings and planning benefits) for 2015. As a result, health and benefit offerings are being diluted and some employees will be negatively impacted due to higher copays and deductibles and could even cause some to decline employer-provided health care coverage.

    SHRM and its members believe effective health care reform should expand access and affordable coverage. Organizations should not be forced to choose between a levy and their employees’ health and benefits packages. Furthermore, hardworking employees should not have to pay more out-of pocket health care costs in order to afford the required changes to comply with the ACA.

    Therefore, we strongly encourage members of the House of Representatives to co-sponsor H.R.2050 and H.R.879