The health care proposal submitted by Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, would require employers to disclose the cost of health benefits on workers’ W-2 forms.
The America's Healthy Future Act calls for businesses to disclose the value of benefits provided by the employer for each worker’s health insurance coverage on the employee’s annual Form W-2. The measure would be effective beginning in 2010. The provision “has a negligible revenue impact over 10 years,” according to the bill.
The Senate Finance Committee’s bill, however, backs way from an employer mandate on health insurance. Still, under the bill, all employers with more than 50 workers that do not offer coverage will have to reimburse the government for each full-time employee who receives a health care affordability tax credit in the proposed health insurance exchange. The payment must be equal to 100% of the average exchange subsidy up to a cap of $400 per total number of employees, whether they are receiving a tax credit or not.
Weighing in
“The Senate Finance Committee proposal avoids many of the destabilizing provisions included in other legislative proposals, such as the employer pay-or-play mandate, unlimited state law remedies for employers obtaining coverage within the insurance exchanges, federal waivers to states that enact single-payer systems and the public health insurance option,” says American Benefits Council President James A. Klein.
ABC, however, continues to have concerns with some provisions in the measure, such as the costly excise tax, fees on health insurers and other stakeholders, and the tax on valuable prescription drug coverage for retirees. “These costs are all likely to eventually be paid by employers and employees and would therefore make health care less affordable,” Klein contends.
Other highlights in the Baucus bill:
- Responsibility for employers: If an employee is offered employer-provided health insurance coverage, the individual would be ineligible for a health care affordability tax credit for health insurance purchased through a state exchange. An employee who is offered coverage that does not have an actuarial value of at least 65%, or who is offered unaffordable coverage by their employer, can be eligible for the tax credit. Unaffordable is defined as 13% of the employee’s income.
- Limit health FSA contributions: The proposal would limit the amount of contributions to health flexible spending accounts to $2,000 per year, beginning in 2013.
- Eliminate deduction for employer Part D subsidy: The provision would eliminate the deduction for the subsidy for employers that maintain prescription drug plans for their Medicare Part D eligible retirees. This would be effective beginning in 2011.
- Standardize the definition of qualified medical expenses: Beginning in 2011, this proposal would conform the definition of qualified medical expenses for health savings accounts, health FSAs and health reimbursement arrangements to the definition used for the itemized deduction. An exception to this rule would allow amounts paid for over-the-counter medicine with a prescription to still qualify as medical expenses.
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