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Excise Tax Update
January 15, 2010 -- With a health care reform deal announced loudly in
the media between “labor,” the administration and Congress on changes to the
excise tax provision, I want to provide you a new update today that outlines
some of the key elements of that deal and what we know about the potential
impact they will have on each and every one of you.
From Day One, we forcefully argued that the excise tax was bad policy and bad
politics and that it had no place in any health care reform bill. Not once did
we waver from that argument.
Our message was heard and we believe had a significant impact on what
ultimately came out of the negotiations between representatives of the labor
movement, the administration and Congress.
We believe we can say with confidence that our constant and consistent
message resulted in significant changes to the excise tax provision of the
reform bill that the House and Senate now must finish debate on and send to the
president.
I don’t want to overstate this, but suffice it to say that our hard
opposition to the excise tax convinced negotiators to agree to new provisions
that, while they fall short of our goal of eliminating the excise tax, these
changes do effectively eliminate the burden of additional taxes that would have
fallen on our members had the tax remained unaltered.
Based on the initial information we have received from the AFL-CIO on the
changes to the excise tax provision, we know that:
• Every health plan covering our members is exempt from the tax until 2018,
based on new provisions that collectively bargained health benefits will be
exempt from the tax until 2018, as would the benefits of all state and local
municipal worker plans even if not collectively bargained;
• The threshold for the tax to kick in on family plans has been raised from
$23,000 to $24,000 for all workers, and from $26,000 to $27,000 for our members;
• The cost of dental and vision coverage will be excluded from the cost of the
plans when determining if they rise above the threshold beginning in 2015;
• Each year after 2013, the $27,000 threshold for our members will increase by
the CPI + 1 percent and will rise even more in high cost states;
• Further, if health care costs rise faster than expected prior to 2013, the
initial thresholds will also be increased, as well.
While there’s significantly more to the deal than just these initial bullets,
and we are going to do a full and complete analysis over the coming days, we
have not been able to identify a single IAFF member’s health care plan that
would or will be subject to the excise tax based on these new provisions
scheduled to take effect in 2018.
We know there’s a lot more to go in the political process before this bill is
finally approved by both houses of Congress and signed by the President, but we
are pleased that our efforts to protect our members from a severe economic
penalty appear to have made a significant impact on what we are told will be in
the final legislation.
We will update all of you as more details of the bill emerge.
January 14, 2010 Message from President
Schaitberger on Excise Tax
January 11, 2010 Message from President
Schaitberger on Excise Tax
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