Health Care Legislation: What Cadillac Tax Delay Means for Health Accounts

It’s hard to keep up with all the health care legislation news lately. That’s why we’re providing regular summaries of the latest news, reflecting the current state of health care in the United States or how it may be changing in the not-too-distant future. Here’s a recap of some of the latest stories:

Cadillac Tax Delayed until 2022 and How It Affects Health Accounts

The stop-gap funding measure signed by President Donald Trump on Tuesday, January 22 included a delay of the Cadillac Tax until 2022. The Cadillac Tax, originally imposed as part of the Affordable Care Act (ACA), is an excise tax on high-cost employer health plans meant to fund increased Federal expenditures on health care. The Cadillac Tax was scheduled to take effect in 2018 and, when effective, would take contributions to health Flexible Spending Accounts (FSAs), Health Reimbursement Arrangements (HRAs), and Health Savings Accounts (HSAs) into account when determining taxable benefits. Almost from inception, the Cadillac Tax has faced broad bipartisan opposition and has been subject to several attempts at repeal. Legislators initially succeeded in delaying the tax until 2020 in December 2015 and have now further delayed the tax until 2022. It is likely that legislators will continue to fight for an eventual repeal of the tax.

Alex Azar Confirmed as Secretary of Health and Human Services

Also potentially impactful for the CDH industry, the Senate confirmed Alex Azar as Secretary of Health and Human Services (“HHS”) on Thursday, January 24. Azar was most recently CEO of pharmaceutical company Eli Lilly, but had previously served as general counsel and deputy director of HHS under George W. Bush. Azar replaces former Secretary Tom Price. Azar has spoken about improving outreach to Capitol Hill and is an opponent of the ACA. It is likely that Azar will continue former Secretary Price’s efforts to reform the ACA legislatively and through regulatory action.