Healthcare

GOP senators blast union ‘carve out’ in ObamaCare tax

Two Senate Republican chairmen are calling out the Obama administration for what they say is a special deal for unions in applying an ObamaCare tax.

{mosads}Senate Finance Committee Chairman Orrin Hatch (R-Utah) and Judiciary Committee Chairman Chuck Grassley (R-Iowa) sent a letter to Secretary of the Treasury Jack Lew on Wednesday about the special conditions for certain union-heavy occupations in the so-called “Cadillac Tax.”

The tax falls on generous healthcare plans with the aim of providing an incentive to reduce healthcare spending. If the benefits in a plan are above a certain limit, a 40 percent tax is imposed.

There is a higher cap, though, for people with a “high-risk profession.” Those professions include electrical workers, paramedics, construction workers, miners and longshoremen.

The senators note that these are union-heavy professions, and point out that labor leaders, including AFL-CIO head Richard Trumka, were opposed to the Cadillac Tax in the first place. 

“While we agree that the tax was, in Mr. Trumka’s words, a ‘stupid mistake,’ the cure for this mistake is not a carve out for the President’s political supporters but a repeal that benefits all Americans, including the countless teachers, nurses, and other professionals that will be subject to this tax over time,” the senators wrote. 

They cited the tax as another reason the entire health law should be repealed. 

“Now is not the time to divide workers against one another, creating different rules to protect favored constituencies from a poorly designed, drafted, and implemented law,” they wrote. “Instead, we urge you to work with Congress to relieve all Americans from the burdens of the health care law.”

The letter comes in response to an IRS request for comment that was issued Monday on rules related to the tax.

The AFL-CIO defended the special conditions on the tax, noting that they are ingrained in the law.

“I’m not sure if there’s an indication that the administration should not follow the law,” said Shaun O’Brien, the AFL-CIO’s assistant policy director for health and retirement.

He said the law is explicit “not about a carve out but about reflecting the higher health costs and the higher injury rates in certain occupations.”

The “Cadillac Tax” is set to take effect in 2018. The senators ask Lew in the letter if there are any plans to delay or modify it. 

“Has the Department considered expansion of the organized labor protection to all Americans, regardless of occupational category?” they write. 

Tags Chuck Grassley Jack Lew Orrin Hatch
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