UNITE HERE Joins New “Alliance to Fight the 40,” Calling for Repeal of 40% Tax on Health Benefits
[Washington, D.C.] Today, UNITE HERE joins labor, businesses and consumer advocacy groups to launch the Alliance to Fight the 40, a coalition calling for the repeal of an onerous 40% tax on health benefits starting 2018 as part of the Affordable Care Act (ACA). UNITE HERE, which represents 270,000 housekeepers, cooks and other workers in the hospitality industry, 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.
Now critics of the excise bill are calling the nation’s top political leaders to take action, and their push is gaining steam. In April, Congressman Joe Courtney (D-CT) introduced the “Middle Class Health Benefits Tax Repeal Act,” a bill designed to eliminate the 40% excise tax. Since its introduction, the bill has gained bipartisan support, and its co-sponsors have climbed from 60 to nearly 200 congressional representatives.
“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 Unless this tax is repealed, thousands could lose their benefits.”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.”
Participants in today’s Alliance to Fight the 40 launch include UNITE HERE, the American Benefits Council, Congressman Frank Guinta (R-NH), Congressman Joe Courtney (D- CT), LiUNA, the Corporate Health Care Coalition, Willis Human Capital Practice, La Mesa-Spring Valley School District and others.
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. Visit www.Fightthe40.com for more information about the Alliance to Fight the 40.