The Senate looks to pass the Patient Protection and Affordable Health Care Act, H.R. 3590, on December 24, 2009, and then adjourn for the holiday recess.  H.R. 3590 still includes the excise tax, which would inflict a 40 percent tax on health insurance companies, administrators, and self-insured employers that offer and administer high-cost health plans.  At this point, amending the bill to scale back or eliminate the tax is no longer possible given the rules of debate for the bill.  However, NAPO (MPA’S NATIONAL AFFILIATION) believes we will be able to amend or eliminate the excise tax during conference negotiations between the House and Senate.  The House-passed health care bill, H.R. 3962, does not include an excise tax.  Conference negotiations are expected to begin at the beginning of January.

NAPO strongly opposes the excise tax and has fought its inclusion in the bill since the beginning.  When it was first proposed by Senator Max Baucus (D-MT) in the Senate Finance Committee health care overhaul legislation, NAPO sent a letter to Senate leadership urging them to look at and recognize the harmful consequences the excise tax would have on the health care plans of a significant number of our nation’s workers.  Click here to view NAPO’s letter to Majority Leader Harry Reid.

Currently, the excise tax would be imposed on plans with annual costs higher than $8,500 for single coverage and $23,000 for family coverage.  The thresholds would be higher for retirees over 55 years of age or individuals engaged in high-risk professions, including law enforcement, EMS, and fire fighters.  Despite the higher thresholds, comprehensive plans and plans that cover predominantly public safety officers would be hit by this tax as it is based on the total cost of the plan regardless of what it covers or why it costs so much.  NAPO is deeply concerned that public safety employees will be forced to pay the excise tax in the form of wage cuts, higher premiums, increased out-of-pocket costs, and lower benefits.

After months of work, it has finally become evident to a majority of lawmakers that the excise tax will adversely affect middle-class Americans far more than they originally projected.  There is significant support in the Senate and House to remove the tax from the final legislation.  180 democratic members of the House signed on a letter of opposition from Congressman Joe Courtney (D-CT) to Speaker Nancy Pelosi.

NAPO, together with other organizations representing state and local government employees, continues to work with lawmakers to remove the excise tax from the final health care bill.  The real fight against the tax will be in January during conference negotiations.  Please join NAPO’s efforts and let your congressional representatives and senators know how the excise tax will affect the health care benefits you have worked hard to earn.  Congress needs to recognize that this excise tax penalizes middle-class, hard working Americans, many of whom serve their country in public service, and that is unacceptable.  Please continue to check NAPO’s website, www.napo.org, for updates on this and other issues.