House Passes Tax Measure with Extension of Medical Device Tax Moratorium

December 21, 2018

The U.S. House of Representatives passed a year-end tax package on Thursday, December 20 that includes a five-year extension, through 2024, of the current two-year moratorium on the Affordable Care Act’s (ACA) 2.3 percent medical device tax. Although the Senate is not expected to take up the tax measure before adjourning for the year, inclusion of the extended moratorium lays the groundwork for further consideration when the new Congress convenes in January. BioUtah will continue to actively push for timely action on this issue.

In letters to Utah House members, BioUtah urged support for the bill and passage of the extended delay. Since the tax was first enacted as part the ACA, BioUtah has strongly advocated for full repeal of the tax. We have also worked closely alongside Utah’s congressional delegation and our national trade association partners, AdvaMed and MDMA, to prevent the tax from taking effect. While permanent repeal is still the goal, the five-year extended delay is a welcome first step, providing more certainty for the industry to make long-term investments in R&D to foster new cutting-edge medical technology. This is a top priority for numerous Utah companies that innovate and manufacture medical devices to help patients enjoy longer, healthier lives.

The tax package also delayed for an additional year, until 2023, implementation of the excise tax on high-cost employer-sponsored health coverage, known as the “Cadillac tax”. Furthermore, suspension of the ACA’s health insurance tax was extended for 2020 and 2021.