Congress to Address Health Care Taxes After Tax Reform

By November 13, 2017Shopfloor Policy

As the Ways and Means Committee finished the work of amending the House tax reform bill, Chairman Kevin Brady (R-TX) stated that efforts are already underway to begin consideration of legislation to address key Affordable Care Act (ACA) taxes that are set to go into effect in 2018. This includes both the job-killing medical device tax and health insurance tax (HIT). In a statement, Chairman Brady promised, “We will move to these important health policies separately and immediately after conclusion of our tax reform efforts.” To read the full statement, click here.

The HIT could raise the cost of premiums by an additional $540 for employees’ families receiving health benefits from fully insured larger employers. Small business owners and their employees could shoulder an additional $500 for family coverage as a result of the HIT. These cost increases are preventable if Congress acts. Manufacturers provide competitive health benefits to attract and maintain skilled employees and because manufacturers know it’s the right thing to do. Congress should be making it easier to provide insurance, not more difficult.

Regrettably, it’s not just the HIT. The medical device tax—another tax that discourages innovation, growth and job creation—is ready to go into effect next year. In 2015, a temporary suspension of the 2.3 percent excise tax on medical device manufacturers was enacted after 29,000 jobs were lost as a result of the misguided tax. However, that two-year relief runs out at the end of 2017, making full repeal of this tax critical to manufacturers of medical devices. Manufacturers support immediate action to permanently repeal the medical device tax to prevent this tax from eliminating jobs and hurting local economies in all 50 states.

Manufacturers recognize that Congress must take action to remove the unfair burden of ACA taxes, including the HIT, medical device and “Cadillac” tax, a 40 percent tax increase on high-cost employer-sponsored health plans. Manufacturers are committed to providing quality health insurance options for their employees. This is a vital tool for attracting and maintaining a skilled workforce. The federal government should be encouraging, not discouraging, employers from providing quality health benefits to American workers. The National Association of Manufacturers is leading advocacy efforts to ensure these three taxes are repealed in time for manufacturers to avoid their unnecessary burden.


Catie Kawchak

Director, Infrastructure, Innovation, and HR Policy at National Association of Manufacturers
Catie Kawchak is the Director of Infrastructure, Innovation, and HR Policy with the National Association of Manufacturers. Prior to joining the NAM, Catie was Representative Lou Barletta’s Senior Legislative Assistant and was responsible for managing all of his work on the Transportation and Infrastructure Committee. Catie is a graduate of Calvin College and she has her Bachelor of Arts degree in Political Science with a minor in Economics.

Leave a Reply