AASA Endorses Bill to Repeal Excise (Cadillac) Tax Under Affordable Care Act

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AASA is pleased to support Rep. Joe Courtney's (D-CT) Middle Class Health Benefits Tax Repeal Act, designed to repeal the excise (or 'Cadillac') tax under the Affordable Care Act. Though the tax doesn't go in effect until 2018, employers--including superintendents--find themselves considering a range of options to avoid the unintended consequences of the excise tax. School districts operate with finite, balanced budgets and failing to repeal the excise tax forces schools to choose between maintaining benefits and paying the excise tax or making changes to available health care plans. Read the full letter.

AASA does not take a position on the Affordable Care Act (ACA) in its entirety, though we continue to monitor three specific components that directly impact school districts: 
  • 30 v 40 Hours as Full Time: ACA requires employers to provide benefits to employees working more than 30 hours. School superintendents recognize the important role that compensation and benefits play in ensuring districts' abilities to recruit and retain a high quality staff. That said, the current 30-hour threshold poses a burden and obstacle to school administrators who must balance their district staffing needs within their operating budget. The forced 30 hour threshold undermines long-standing local hiring decisions. School administrators have long negotiated salary and benefit conversations at the local level, and the ACA regulation represents a seemingly arbitrary cap with very real consequences. AASA endorses the Save American Workers Act, which would push the threshold to 40 hours per week, aligned with the long-standing construct of '40 hour work week'. Read the related blog post.
  • Excise Tax: Set to go in effect in 2018, the excise tax will apply to employer-based health insurance that exceeds certain amounts. While envisioned to apply only high-end and overly generous health plans, the tax is far more likely to be based on factors other than benefit richness including age, gender and geography, among others.
  • Employee Contribution Threshold (9.5%): ACA, as it relates to employer-provided insurance, looks to address both access AND affordability. In an effort to reign in affordability, employers can be penalized if the plans they offer include employee contributions that exceed 9.5% of their wages. 

 


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