Some conservative think tanks have been talking about the idea of limiting the amount of group health costs that employers can exclude from their taxable income.

Related: Think tank with Republican ties proposes employer health tax exclusion limit

House Republicans could pay for extending the TCJA tax breaks by packaging them together with a cap on the group health exclusion, Watts and Manville write.

President-elect Donald Trump "has not weighed in on whether he would support capping the tax exclusion," the analysts note. "Mercer is working with employer advocacy groups and other key stakeholders to educate lawmakers on the impact such a change would have on plan members and sponsors."

If House members introduce a bill that includes a cap on the group health tax exclusion, "it will be important for employers to get involved in efforts to ensure lawmakers understand the potential consequences."

The exclusion costs the federal government more than $345 billion in tax revenue per year, according to federal budget analysts.

A provision in the Affordable Care Act of 2010 imposed a 40% excise tax on benefits packages with a value over a specified level. The "Cadillac plan" excise tax was unpopular with both employers and unions. Congress repealed it in a bill that Trump signed into law in 2019.

Employer groups and health benefits groups recently joined together to tell congressional leaders that employers spend an extra $5.36 on health benefits for every $1 in tax savings they achieve.