ECFC Leads Charge to Revise Cadillac Tax

9/29/2015

ECFC Leads Charge to Revise Cadillac TaxNation’s Leading Benefits Experts Align to Advocate for Employers, Employees

Washington, D.C. – September 29, 2015 – ECFC, the leading nonprofit organization promoting choice in benefit solutions, continues to lead the charge to revise the excise tax, commonly referred to as the Cadillac Tax. It is calling on Congress to carve out consumer directed health plans, which have proved to be one of the most effective ways to reduce healthcare costs.

“As currently defined, the excise tax will penalize high-cost health plans as well as consumer directed health plans used by millions of American workers and their families,” said Bill Sweetnam, ECFC’s legislative and technical director. “We have been working hard to lobby for Congress to repeal the excise tax and, if Congress does not think that is possible, revise the excise tax so that consumer directed health plans are not subject to the tax because we believe it just doesn’t make sense to include them.”

ECFC, an organization of nearly 200 employer members, spearheads the education and advocacy of consumer directed benefit plans, such as flexible spending arrangements (FSAs), health reimbursement arrangements (HRAs) and health savings accounts (HSAs). These plans assist employers and employees in making good healthcare decisions and it’s estimated that more than 100 million Americans today benefit from consumer directed health plans.

The topic of the excise tax took center stage at ECFC’s Annual Conference in March, the ECFC Fly-In congressional event in June and again at ECFC’s 28th Annual Administrators’ Symposium in August. These events have been key in bringing together industry experts in healthcare legislation and Affordable Care Act (ACA) compliance to promote and protect consumer directed health plans.

The excise tax is designed to fill the $87 billion budget hole created by the ACA and is one of the last provisions of the ACA to be implemented.  As proposed, a 40 percent excise tax would be levied on company provided health benefits and related perks valued at more than $10,200 for singles and $27,500 for families.

While it’s not scheduled to take effect until Jan. 1, 2018, companies are analyzing the impact and making decisions now as they plan employee benefits for the coming years.

“It just doesn’t make sense for hard-working Americans to now be penalized for trying to set aside money to pay for their healthcare,” Sweetnam said. “ECFC is committed to getting this legislation changed so that consumer directed plans, such as HSAs, HRAs and FSAs are carved out from this tax.”

If not revised, at least 48 percent of employers are expected to trigger the excise tax in 2018; 82 percent could be subject to it by 2023, making the excise Tax the rule rather than the exception.

About Employers Council on Flexible Compensation
The Employers Council on Flexible Compensation (ECFC) is a non-profit organization dedicated to the maintenance and expansion of private employee benefit programs on a tax-advantaged basis. The organization has two driving missions. The first is to represent and promote flexible compensation programs through effective lobbying. The second is to provide information on flexible compensation programs to member, national opinion leaders and the general public to help create a positive climate for the growth of flexible compensation.

Media Contact:

Martin Trussell
(202) 659-4300
mtrussell@ecfc.org

About Employers Council on Flexible Compensation

The Employers Council on Flexible Compensation (ECFC) is a non-profit organization dedicated to the maintenance and expansion of private employee benefit programs on a tax-advantaged basis. The organization has two driving missions. The first is to represent and promote flexible compensation programs through effective lobbying. The second is to provide information on flexible compensation programs to member, national opinion leaders and the general public to help create a positive climate for the growth of flexible compensation.