Members of the Ways and Means Committee on Tuesday introduced five separate bills to deliver, and in many cases extend, targeted relief from Obamacare taxes set to take effect in 2018.
The bills include a moratorium on Obamacare’s so-called 40 percent “Cadillac Tax” on the priciest of health insurance policies, temporary relief of the 2.3 percent tax on medical device sales starting in 2018 and an extension of the qualified tax treatment of over-the-counter drugs bought without prescriptions.
Almost all of the tax relief has been approved before. But approval this year, with Congress racing to approve both tax reform and budget reconciliation in the waning days of 2017, may go down to the wire. A House Ways and Means Committee spokesman did not immediately provide a pricetag for each bill.
“Obamacare’s failures are continuing to hurt families across the country—and allowing burdensome health-care taxes to continue or go back into effect would make these problems even more severe, Ways and Means Committee Chairman Kevin Brady (R-Texas) said in a statement announcing the bills.
“As we continue working toward a patient-centered health care system, Ways and Means Republicans are taking action to provide targeted relief from taxes that stand in the way of affordable health care, innovative treatments, access to medications, more jobs, and bigger paychecks for hardworking Americans,” Brady said.
The following five bills were introduced by the committee:
• H.R. 4616, introduced by Reps. Devin Nunes (R-Calif.) and Mike Kelly (R-Pa.), would pause Obamacare’s so-called Cadillac Tax by delivering three years of retroactive relief and one year of prospective relief from what the committee called the “harmful employer mandate.” The provision levies a hefty 40 percent tax on the most expensive employer-provided insurance plans: those above $10,200 for individuals and $27,500 for families.
• H.R. 4617, introduced by Reps. Erik Paulsen (R-Minn.) and Jackie Walorski (R-Ind.), provides relief from what the House Ways and Means Committee calls “the job and innovation-killing Medical Device Tax” for five years. The bill provides a temporary moratorium on the medical device excise tax, by pushing the tax into 2022. The 2.3 percent tax on medical device sales that is part of the ACA has already been on a temporary hiatus since the beginning of 2016.
• H.R. 4618, introduced by Rep. Lynn Jenkins (R-Kan.), provides relief for two years from the Obamacare tax on over-the-counter medications bought without a prescription, “expanding access and reducing health care costs by once again allowing for reimbursement under consumer-directed accounts” like Health Savings Accounts (HSAs) and Medical Savings Accounts (MSAs), the committee said in a statement. The bill allows over-the-counter drugs as well as insulin purchased without a prescription to be treated as a qualifying medical expense that receives preferred tax treatment for another two years.
• H.R. 4620, introduced by Rep. Kristi Noem (R-S.D.), “provides another year of relief in 2018 from the original Obamacare health insurance tax if the insurer provides the plan holder with a premium rebate,” the committee said in a statement. The bill would delay the tax to 2019 for insurers who offer qualified rebates to individual plans, group plans, Medicare Advantage Plans and/or prescription drug plans. To qualify for the tax treatment, insurers must demonstrate they offer policyholders a rebate on net premiums for the year.
• H.R. 4619, introduced by Rep. Carlos Curbelo (R-Fla.), provides two years of temporary relief from the Obamacare Health Insurance Tax for health care plans regulated by Puerto Rico. The bill is designed to ensure that health-care insurance premiums do not increase in the wake of the 2017 hurricane that devastated the island. “I appreciate my colleagues for their work on common-sense proposals that will reduce health-care costs for families, provide flexibility for employers to offer the plans that are right for their employees and help American businesses bring jobs back to the United States. I look forward to continuing this work and advancing legislation in the weeks ahead,” Brady added.