Industry groups are gearing up for a final push to repeal or delay taxes in ObamaCare before the end of the year.
Stalling the taxes on medical devices and health insurance, which were included in the health-care law to help pay for its coverage expansion, has been a rare area of some bipartisan cooperation on ObamaCare. There are members of both parties who oppose the taxes and have previously come together to push them off.
But the previous delays are running out on Jan. 1. With the taxes looming, health insurers, medical device companies and others are pushing to make sure they aren’t hit.
Delays of the taxes, either for one or two years, could be attached to larger legislation moving through Congress at the end of 2017.
An industry source said lawmakers have told them tax delays would be attached to a bill to continue expiring Medicare programs, known as “extenders,” in December. The situation could change, though. The year-end spending bill is another potential vehicle.
Greg Crist, executive vice president for public affairs at AdvaMed, the medical device industry trade group, said his organization is pushing for full repeal of the device tax, but would not “turn our nose” to a short-term delay.
“We feel we’re very much in play and that is for full repeal,” Crist said. “We’re talking with staff and leadership for the right vehicle.”
Device companies argue that the 2.3 percent tax harms job creation and innovation for new treatments, and the return of the tax is a burden on future plans.
“We’re looking at next generation treatments, next generation creations for 2025 not 2018; that’s why we need the certainty that comes with that,” Crist said.
Health insurers, meanwhile, argue that the Health Insurance Tax (HIT) drives up premiums. Pushing off the tax, they argue, is a way to help lower premiums.
“We’ve been incredibly encouraged by the bipartisan response to HIT relief, and urge Congress to take immediate steps to extend the HIT suspension and delay before the tax hits small businesses and their employees in 2018,” Elena Tompkins, executive director of Stop the HIT, a coalition of business groups, said in a statement.
The argument against repealing the taxes is that it would erode sources of funding for ObamaCare, especially if the cost is not offset.
House Ways and Means Committee Chairman Kevin Brady (R-Texas) earlier this month confirmed that he is talking with Democrats about a way to put off the taxes before the end of the year.
“As the Ranking Member and Members on the other side of the aisle know — we have been working with them over the past month to find a path forward,” Brady said at a committee session to consider tax-reform legislation this month. “We are working on common-sense temporary and targeted relief from many of these taxes to be acted on in the House before the end of the year.”
He specifically mentioned the medical device and health insurance taxes, as well as a tax on over-the-counter medications.
Another ObamaCare tax that has drawn opposition from both sides of the aisle is the “Cadillac Tax” on generous health insurance plans.
Congress delayed that tax in 2015 with bipartisan support. Lawmakers haven’t devoted much attention to it this year, because it does not come back into effect until 2020.
Still, employer groups who do not want to be hit with the tax on their insurance plans are pushing for it to be dealt with this year as well.
Employer groups are meeting with all of the Republican members of the House Ways and Means Committee, in addition to key Democrats, to push for a Cadillac tax delay, according to James Gelfand, the senior vice president for health policy at ERIC, a national association advocating for large employers.
Only three Senate Democrats on the Finance Committee voted against repealing the Cadillac Tax during a session on tax reform this month. But Republicans voted down the measure, saying they wanted to deal with it at another time, not in the tax-reform bill.
Advocates of repealing the medical device and health insurance taxes are pointing to a new level of bipartisan support. Democrats in close election races in particular are pushing for action.
Sen. Heidi Heitkamp (D-N.D.), up for reelection next year, introduced a bill last month to delay the health insurance tax for two years.
Rep. Kyrsten Sinema (D-Ariz.), who is running for Senate in Arizona, is leading the charge on the Democratic side in the House to repeal the tax.
On the medical device tax, 179 House lawmakers, including 43 Democrats, signed a letter last month calling for relief from the tax.
“This looming tax increase will impact medtech innovation and job creation, threatening this industry and the constituents we serve,” they wrote.
The IRS has announced that the contribution limits for health flexible spending arrangements (health FSAs), qualified small employer health reimbursement arrangements (QSEHRAs), and 401(k) retirement plans will increase in 2018 as follows:
To learn more about the tax treatment of various employer-provided benefits, check out our Employee Benefits section.
The Internal Revenue Service (IRS) has released the final forms and instructions for Forms 1094 and 1095 for calendar year 2017 reporting. Employers are required to report in early 2018 for calendar year 2017.
2017 Forms and Instructions
The following calendar year 2017 reporting forms and instructions are now available:
The deadlines for submitting Forms 1094 and 1095 are as follows:
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