In a letter to Majority Leader Harry Reid, Verizon CEO Ivan Seidenberg and AT&T CEO Randall Stephenson called the excise tax a "misguided tool" that may have been "intended to address only excessive or luxury plans" but will instead "impact the health plans covering tens of millions of workers."

The letter, sent in December and also signed by Communications Workers of America President Larry Cohen and International Brotherhood of Electrical Workers President Edwin Hill, predicts the 40% excise tax will "likely have the unintended effect of discouraging the provision of employer-sponsored health coverage, thereby undermining one of the goals of health reform legislation and placing more of the cost and burden of providing this vital coverage onto the federal government."

In a separate letter to U.S. Senators, Qwest CEO Edward Mueller and Cohen argue that the excise tax will reduce “benefit levels and increase premium cost-sharing for all Qwest employees, retirees and their families.”

“Business leaders are increasingly recognizing that the proposed excise tax makes no sense for their workers or their businesses,” said Congressional Progressive Caucus Co-Chair Rep. Lynn Woolsey (D-Calif.). “Health care reform should be financed by tax surcharges on the wealthy and not by taxes on health insurance plans offered to middle-class workers, older persons and union members.”

Congressional Progressive Caucus Co-Chair Rep. Raul M. Grijalva (D-Ariz.) said he considers the excise tax, opposed by major employers, labor unions and other groups, “a burden that millions of American families cannot afford to pay. Health care reform must be economically sustainable not only for the government, but for working men and women around the country. Policies that lead to reduced health care or potentially higher taxes on middle income working families, people with disabilities and people with chronic illnesses in the name of saving money are not policies Congress should support.”