WASHINGTON, D.C. (Dec. 10, 2015) - U.S. Senator Martin Heinrich (D-N.M.) is leading the effort to fully repeal a provision in the Affordable Care Act (ACA) known as the "Cadillac Tax," which would tax high-cost health insurance plans and impact health benefits for New Mexicans. He spoke on the Senate Floor with U.S. Senator Dean Heller (R-Nev.) last night to call for the elimination of this excise tax before the end of the year and to discuss the bipartisan legislation they introduced, the Middle Class Health Benefits Tax Repeal Act of 2015.
"Doing away with this onerous tax on employees' health coverage before it goes into effect will protect important benefits for workers and ensure that businesses and families get a fair deal," said Sen. Heinrich during his speech. "The landmark reforms in the Affordable Care Act have given thousands of New Mexicans access to quality, affordable health care for the first time in their lives. But even the strongest supporters of the law know it isn't perfect and that there are some parts that need to be fixed. That is why I'm leading a bipartisan effort with Senator Heller to repeal the Cadillac tax that places an unfair burden on middle-class families who rely on employer-provided health plans."
Beginning in 2018, the Cadillac Tax will tax employers whose health insurance plans cost more than $10,200 a year for individuals and $27,450 a year for families at 40 percent of the cost above those limits. The tax will force many employers to pay steep taxes on their employees' health plans and flexible spending accounts, and possibly eliminate some employer-provided health coverage plans altogether.
In New Mexico, small business owners, labor unions, counties, rural electric co-ops, and municipalities all oppose the tax. Across the state, 751,000 workers--including 43,000 union employees--who rely on employer, provided health insurance could experience significant changes to their health care as a result of this tax.
There is strong bipartisan, bicameral support behind repealing this provision. An amendment to fully repeal the Cadillac Tax was included in the budget reconciliation bill last week, which passed the Senate with a 90 to 10 vote.