U.S. House Considers Bill to Delay and Repeal Obamacare Taxes

Published October 24, 2018

The bill would repeal or delay several of the most burdensome taxes and regulations implemented under Obamacare, saving businesses and individuals billions of dollars over the next decade.

The House voted on September 14 to refer SAWA to the Committee on Ways and Means. A previous version of SAWA passed the House in 2014 but failed in the U.S. Senate.

Delaying the Employer Mandate

The bill would delay imposition of the employer mandate provision in the ACA, under which the Internal Revenue Service had sent penalty notices to businesses for failing to comply as late as May 2018, a May 6 article in The New York Times reported.

The employer mandate issues penalties ranging from $2,000 to $3,000 per employee. SAWA would delay the employer mandate penalty until 2019.

Charlie Katebi, a state government relations manager at The Heartland Institute, which publishes Health Care News, says passing the bill would increase businesses’ incentive to hire full-time employees.

“Delaying the employer mandate in particular would make it far easier for businesses to hire full-time workers,” Katebi said. “The Save American Workers Act would provide enormous tax relief to families and entrepreneurs harmed by Obamacare,” Katebi said.

Redefining ‘Full-Time’

The Obamacare regulations define a “full-time employee” as anyone who works at least 30 hours per week. The traditional full-time work week has been 40 hours. SAWA would adjust the definition of a full-time employee to constitute an employee who works at least 40 hours per week.

Heartland Institute Government Relations Coordinator Arianna Wilkerson says the ACA’s redefinition of full-time workers has caused a cascade of negative effects, especially for lower- income workers.

“The redefinition of ‘full-time employee’ by the Obama administration led to many unintended consequences, as heavy-handed government regulations usually do,” Wilkerson said. “Employers quickly responded to Obamacare by cutting part-time employees’ work week to less than 30 hours to avoid having to offer them expensive health insurance or else pay a penalty. Presumably, if business owners believed it was financially sound to offer health insurance to all employees, they would already be doing so without any government coercion.”

Pushing Back the Cadillac Tax

SAWA would also delay imposition of Obamacare’s so-called “Cadillac tax,” a 40 percent excise tax on employers who offer health insurance plans that exceed $10,200 for individuals and $27,500 for families, and repeal the 10 percent excise tax Obamacare levies on indoor tanning salons.

Wilkerson says the Cadillac tax provision is an example of the federal government using the tax code to bully businesses.

“The Cadillac tax allows the government to pick winners and tax losers,” Wilkerson said. “‘Winners’ are employers who offer their employees high- deductible, low-coverage insurance plans. ‘Losers’ are employers who offer low-deductible, high-coverage plans. Employers should have the freedom to offer the type of health insurance that is affordable and meets the needs of their employees.”

Katebi says the tax on tanning salons has done little to help pay for the costly health care law.

“Attempting to fund Obamacare by taxing tanning salons is a fiscal folly,” Katebi said.



“New Bill to Make Four Changes
to the Affordable Care Act,” Tax Foundation, September 13, 2018:
https://taxfoundation.org/new-bill- make-four-changes-affordable-care- act.