National Coalition on Benefits Letter to Speaker Ryan and Majority Leader McConnell
Dear Speaker Ryan and Majority Leader McConnell:
On behalf of the National Coalition on Benefits (NCB), we urge you to include a two-year delay of the 40 percent tax on health benefits in year-end legislation. We are a Coalition comprised exclusively of businesses and employer associations dedicated to supporting the employer-sponsored coverage valued by more than 150 million American beneficiaries.
The NCB has long been an advocate in supporting employer-sponsored coverage, preserving ERISA preemption and exploring innovative solutions to increase access to, and affordability of, health care coverage and services. However, the broad application of this tax means that, over time, the employer-sponsored health benefit plans of all U.S. employers will be subject to the tax. The impact of the eventual tax liability is staggering. It will distort the employer-sponsored health care marketplace and lead to dramatic reductions in the level and richness of benefits offered to employees. Businesses — large and small, with unionized and non-unionized workforces — care deeply about this issue. This is not simply a union issue. It is about employers and workers. In fact, many employers concerned about the tax have non-unionized workforces.
In addition, implementation of the 40 percent tax on health benefits is estimated to result in job losses that could total 2.6 million by 2035, and real personal income in 2014 dollars would be reduced by almost $3,800 per household. It is also estimated that the economic burden of this tax would reduce GDP by 1.7 percent by 2035.
Employers are making decisions now about their 2018 benefits packages. Our members are committed to offering high-quality, cost-effective health benefits to employees and their families, but need relief from this tax to ensure that employees are not negatively affected. A delay in the implementation of the 40 percent tax will allow Congress to further examine the proposed interpretation of the law, as well as to weigh in with the Administration to ensure that potentially negative consequences are properly evaluated and addressed.
Thank you for your attention to this important matter. We stand ready to work with you toward a solution that works for American businesses, employees and families.
National Coalition on Benefits