President Obama capped a year-long, seesaw battle for his top legislative priority by putting his signature March 30 on the health care reconciliation bill that Congress passed before leaving town. The Health Care and Education Reconciliation Act (H.R. 4872) contains changes to the larger health care reform bill signed into law by President Obama on March 23. The second bill was needed to bridge differences between the Senate and House versions of health care reform.
One of the major changes in the reconciliation bill is the creation of a 3.8 percent tax on unearned income for individuals making more than $200,000 a year and families making more than $250,000, and raised thresholds for an excise tax on high-cost so-called “Cadillac” health insurance plans. The reconciliation bill also increases the size of tax credits to help middle-class families and small businesses pay for health insurance, and provides $250 to seniors who fall in the Medicare coverage gap known as the “doughnut hole” to help them pay for prescriptions.
Small Business Provisions
There are also provisions for assistance to small businesses. All employers with fewer than 50 employees would be exempt from penalties for not providing insurance. To help small employers provide coverage for their employees, employers who offer coverage and have 25 or fewer employees that have an average salary of $50,000 would be eligible for a tax credit for three years.
For 2010 through 2013, eligible employers will receive a small business credit for up to 35 percent of their contribution toward the employee’s health insurance premium. Tax-exempt small businesses are eligible for tax credits of up to 25 percent of their contribution.
In 2014 and later, eligible employers who purchase coverage through the Exchange can receive a tax credit for two years of up to 50 percent of their contribution. Tax-exempt small businesses are eligible for tax credits of up to 35 percent of their contribution.
What It Means to Agents: See PIA’s analysis of the potential impacts of the new law as published in last week’s PIA National Newsline.
Final Healthcare Reform Bill Enacted (PIA 4/1/10)
The New Health Care System (ASAE summary)
April 7, 2010