Yesterday, Senator Jay Rockefeller, D-W.Va., introduced the Children’s Health Care Insurance Program Extension Act of 2014, a bill that would extend CHIP through 2019. The full text of S.2461 has not been posted to the Library of Congress’ THOMAS legislative information database as of yet, though the bill was read twice in the Senate and referred to the Committee on Finance.
In an advisory sent to their membership, the Cigar Association of America said that they had been preparing for CHIP legislation, and does not believe Rockefeller’s bill will gain significant traction this year.
The group added that “importantly for the cigar industry, Rockefeller’s bill extending CHIP lacks a funding mechanism, and Congress does not need to act on CHIP before the program’s funding expires in September 2015. Those factors, combined with Rockefeller’s planned retirement at the end of this year, make it highly unlikely that a Rockefeller-backed CHIP extension will pass in 2014.”
CHIP was originally created in 1997 to provide matching funds to states for health insurance to families with children. President Barack Obama expanded the program on February 4, 2009, when he signed the Children’s Health Insurance Reauthorization Act of 2009, which added an additional 4 million children and pregnant women, as well as including legal immigrants without a waiting period for the first time. It was originally known as the State Children’s Health Insurance Program and often referred to as S-CHIP.
With that expansion came a new federal tax on cigars, 52.4 percent, with a maximum tax cap of 40 cents per cigar. While not overly well received by the industry at the time, it was a significant improvement on previous proposed taxes, with the original version calling for a $10 cap and a revised version having a $3 cap.