For immediate release
April 28, 2015
[Washington, DC] Today, Congressman Joe Courtney (D-CT) is introducing the “Middle Class Health Benefits Tax Repeal Act,” a bill designed to protect workers from getting hit with an onerous 40% tax on their health benefits. The move, backed by 40 House Democrats, is being applauded by UNITE HERE, a union representing 270,000 hospitality workers. The union says the tax puts health plans for thousands of its members and millions more nationwide at risk.
Come 2018, individual health plans worth more than $10,200 and family plans worth more than $27,500 will be hit with a whopping 40% excise tax. The tax was supposed to just hit elite plans, but UNITE HERE says working families will be hit the hardest.
“Billionaires in America don’t face a tax rate as high as what a housekeeper with decent health care will pay for her benefits,” says D. Taylor, President of UNITE HERE. “Our members aren’t rich, but good, affordable health care for their families is one key factor separating their jobs from fast food work. Unless this tax is repealed, thousands could lose their benefits.”
A report by Towers Watson shows that nearly half of U.S. employers are expected to face the healthcare tax in 2018 with 82% triggering the tax by 2023 as costs rise. Numerous experts—including the Joint Tax Committee (JCT), the CMS Actuary, and the Congressional Budget Office (CBO)—believe that employers will respond to the excise tax by reducing the value of health care coverage by increasing deductibles, copays, coinsurance and out-of-pocket limits.
Critics of the tax also say its rationale is based on a faulty promise of generating $87 billion in revenue over the next 10 years. A closer look at documents released by the Congressional Budget Office reveal that it estimates only one fourth of this total, or $22 billion, comes directly from the tax. The remaining increase comes from a theoretical increase in taxable wages, an assumption that Rep. Courtney says, “fail[s] to take into account real world dynamics between employers and their workers.”
For years, Rep. Joe Courtney has led a campaign to stop this tax from being implemented. Supporters of the excise tax wanted it to start in 2013, but its implementation was postponed after 193 House Members signed a letter launched by Rep. Courtney opposing the tax. In late March, 96 House Democrats voted for the Congressional Progressive Caucus’ Budget, which includes a repeal of the 40% Health Benefits Tax.
UNITE HERE represents 270,000 women and men across North America working in the hotel, gaming, food service, manufacturing, textile, distribution, laundry, transportation, and airport industries.