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Agreement Reached on Excise Tax

NEA's Van Roekel says health care legislation will be fair to working families.

by Tim Walker

The White House and labor leaders, following hours of intense negotiations, reached a tentative agreement on Thursday on the controversial excise tax on higher cost health plans, a key financing mechanism of the Senate bill passed in December. The National Education Association and other labor organizations opposed the measure, saying it would result in drastic cuts in health benefits for working families across the country.

The agreement, if it holds, removes a major obstacle for the Obama administration and Congressional negotiators as they try to bring health care reform across the finish line by the end of January.

NEA President Dennis Van Roekel called the meetings at the White House “productive” and said the nation is one step closer to “meeting our shared goal of increasing the number of people who have access to quality, affordable health care.”

Under the new agreement, the thresholds at which plans are hit by the tax have been raised to $8,900 on individual plans and $24,000 on family plans from $8,500 and $23,000, respectively (with an even higher threshold for states with higher health care costs.) The agreement also adds permanent adjustments based on age, gender and high-risk professions and exempts the cost of dental and vision plans from the cost of coverage. In addition, there will be a transition period through January 1, 2018, for state and local employees and those covered under collective bargaining contracts.

With this agreement under their belt, Democratic leaders and White House officials want the Congressional Budget Office to score the bulk of the health care package soon, possibly by the end of this week.

Van Roekel cautioned that, despite Congress being on the verge of passing historic health care reform legislation, “there is still a lot of hard work ahead.”

“But we’re moving ahead in a way that that treats working American families fairly.”

Read NEA President Dennis Van Roekel's full statement.