In a 14-9 vote, the Senate Finance Committee has approved Senator Max Baucus’ health care reform bill, titled America’s Healthy Future Act of 2009. All the Democrats on the committee and only one Republican voted for the legislation. Senator Olympia Snowe, a Republican from Maine who helped work on the bill and whose vote has been the subject of much speculation, voted in favor of the legislation. She specified, however, that her vote is no indication of how she will vote on future versions of health care reform legislation.
The committee voted on the bill after receiving an estimate of the bill’s costs from the Congressional Budget Office (CBO). According to the CBO, over 10 years, the legislation would cost a projected $829 billion and would reduce future federal deficits by $81 billion. The bill must now be reconciled with the health care reform legislation approved by the Senate Committee on Health, Education, Labor, and Pensions (HELP) before a final version is brought to the Senate floor for debate.
The Senate Finance Committee began considering Baucus’ bill on September 22 and has been debating and discussing the bill and the 564 proposed amendments to the legislation. Although the bill still does not require employers to provide health insurance to employees, the committee has made several changes that will affect employers. Some of the notable changes would:
- require states to allow small businesses with up to 100 employees to purchase coverage through the Small Business Health Options Program (SHOP) health insurance exchange beginning in 2015;
- allow states to let employers with more than 100 employees into the state exchange beginning in 2017;
- require small employers that purchase coverage through the exchange to offer plans with deductibles that do not exceed $2,000 for individuals and $4,000 for families (unless offering contributions through a health reimbursement account or some other vehicle would offset a deductible above those limits);
- extend the small business tax credit to tax-exempt organizations, allowing eligible nonprofit organizations to apply the tax credit to payroll taxes instead of receiving a credit toward income taxes;
- reduce the excise tax for people who do not maintain insurance to $750 per adult in the household and phase in the tax each year until the full amount of $750 goes in effect in 2017;
- clarify that the fee employers with more than 50 employees that do not offer coverage would have to pay for each employee who receives a tax credit for health insurance through a state exchange would not be deductible for U.S. income tax purposes;
- provide incentives for participation in voluntary wellness programs;
- raise the tax on insurance companies’ high-end “Cadillac” insurance plans from 35 to 40 percent of the aggregate value of plans that exceed the thresholds of $8,000 for individual coverage and $21,000 for family coverage;
- increase the threshold amount of the tax on the “Cadillac” insurance plans by $1,850 for individual coverage and $5,000 for family coverage for health plans that cover retirees or individuals in certain high-risk professions;
- limit an employee’s salary reductions for purposes of coverage under a health flexible spending arrangement under a cafeteria plan to $2,500 for a taxable year; and
- bar insurance providers from taking business tax deductions for executive compensation exceeding $500,000.
The committee’s vote comes after a lobby for the health insurance industry, America’s Health Insurance Plans, released a report asserting that the committee’s proposal, if enacted, would raise the cost of health insurance coverage. White House spokesman Reid Cherlin dismissed the report as “a self-serving analysis from the insurance industry,” and congressional Democrats have also attacked the report.
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