The Health Care Excise Tax: A Bipartisan Discussion

The Affordable Care Act's excise tax, scheduled to take effect in 2018, is anticipated to affect 17 percent of all American businesses and 38 percent of large employers. The burden of the excise tax on large employers will initially amount to $1 million in 2018, but that figure will grow to an average of $2.1 million per year between 2018 and 2024, or more than $2,700 per employee. By 2031, the cost of the average family health care plan is expected to hit the excise tax threshold.

In an effort to avoid or minimize their exposure to the excise tax, employers are reducing the cost of their health care plans. As a result, employees will likely have to cover more of their health care costs out of pocket and find ways to reduce their own health care expenses. Unfortunately, cost sharing, benefit reduction, and other strategies used by employers to reduce their excise tax exposure threaten to make employer health plans unaffordable for many moderate to low wage employees and their families.

On June 10th, Hudson Institute will host a conference on the problems and issues raised by the ACA's excise tax. A broad and diverse panel of experts featuring Tevi Troy, Bill Samuel, Paul Howard, and Paul N. Van de Water will discuss the implications of the excise tax for employer health plans in both the public and private sectors, as well as its impact on labor unions. Former U.S. Representative Robert E. Andrews (D-NJ) will moderate the discussion.