Health Voucher Program and Expanded 1099 Reporting are Repealed
Two important changes were recently made to the 2010 federal PPACA (Patient Protection and Affordable Care Act) health care reform law:
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Repeal of Free Choice Vouchers
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Repeal of expanded 1099 reporting requirements
Free Choice Vouchers Repealed
Slated for a 01/01/2014 effective date, the Free Choice Voucher mandate would have required employers to give cash vouchers to workers whose group health plan premium contributions represented 8 - 9.8% of their total income. The voucher value would be equal to the amount of the company’s contribution to the most expensive plan offered by the employer. The employee would then take that voucher to their State Exchange and purchase individual insurance. If the cost of an individual policy purchased through an exchange was less than the voucher amount, the employee would pocket the difference.
The voucher program was a cause of concern for many employers, including those with a predominance of low-wage earners. Some of these employers, including retailers and manufacturers, already contribute a high premium percentage to make plan participation accessible for employees. The overall sustainability of some group health plans could have been jeopardized as young, lower-paid employees dropped their employer-sponsored plans in favor of individual ‘exchange’ plans, leaving behind a high concentration of older, less healthy workers in the group plan.
Expanded 1099 Reporting Repealed
While not actually relevant to health care reform, PPACA included a provision requiring all businesses to file a 1099 form with the IRS every time they spent more than $600/year with another business. Many business leaders voiced early opposition to this added reporting burden and the associated paperwork. Bipartisan support for repeal of the provision quickly pushed bills through the House and Senate, with President Obama signing the repeal with HR4 on April 14, 2011.
What’s In Store for the Future?
We have communicated in previous emails that a full repeal of health care reform seems unlikely, but additional specific components of PPACA may be modified as we draw closer to full implementation in 2014. We will continue to keep our clients updated as any additional changes occur.
As always, please feel free to contact us with any questions or concerns.
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