Thursday, July 16, 2009
Federal Health Care Reform Accelerates
With President Obama’s prodding, congressional action on health care reform legislation shifted into high gear this week. The following is a brief recap of the evolving bill status as of today:
- House Action: House leadership released a 1,018-page health care bill that will be marked up over the next week and voted on by the full House before their recess scheduled to begin August 3rd. Provisions of note to employers include:
- Pay or play payroll tax for employers with annual payrolls of over $250,000, with the payroll tax ranging from 2% ($250K - $300K) to 8% for employers with payrolls over $400,000.
- Increased individual income tax rates of 1.2% for incomes over $350,000 (married filing joint) up to a 5.4% rate increase on incomes over $1 million. These new taxes will fall disproportionately on small business owners.
- Automatic enrollment of employees into employer sponsored health plans unless the employee opts out.
- Health insurance exchange for individuals without coverage and small employers with fewer than 10 employees. Also tax credits for certain small, lower-wage employers.
- See a summary of recent bill changes here and the implementation timeline here.
- Senate Action: The Senate HELP Committee yesterday approved their version of a health care bill. Their pay or play employer mandate allowed an exemption for employers with fewer than 25 employees and imposed a tax of $750 per full-time employee and $375 per part-time employee on employers that failed to subsidize at least 60% of qualifying health care coverage. The Senate Finance Committee is to unveil their health care bill any day, with the two bills being merged before Senate floor action.
- Why Should You Care?: All versions of the health care bills include a “shared responsibility” of funding health care by employers: the feds tell you how much to pay, and it’s your responsibility to pay it. The “public plan” option will also be a cause of concern as it will be based on under-funded Medicare rates and likely push additional uncompensated care costs to private payers (such as employers).
- See a Recap of the Bills: From our friends at the National Retail Federation here.
- Take Action Now: Contact your Senators and Representative.
Contact Ron Wineholt for further information at .(JavaScript must be enabled to view this email address).
Good job as usual, Ron. We need lots of calls and contacts with our congressional delegation about the negative impact of this proposal on business.