NAIFA Reports:
Prior to adjourning, the U.S. Senate rejected attempts to repeal two provisions of the Patient Protection and Affordable Care Act (PPACA) signed into law in March.
1099 Reporting:
Enacted as part of PPACA, the Form 1099 requirements force all businesses and tax-exempt organizations to issue a Form 1099 to vendors from whom they buy goods totaling $600 or more annually.
During the small business lending debate, the Senate rejected two amendments to H.R.5297 that would have repealed or alleviated the requirements for small businesses. H.R. 529—signed into law on September 27—expands reporting requirements to include individuals who receive rental income from real estate, and increases penalties for failure to collect and remit this information.
Many legislators on both sides of the aisle agree on the need for relief from these reporting requirements. However, due to statutory pay-go rules that require that the cost of repeal or modification be offset, up to $22 billion (the cost of repeal) in new revenue is required. To date, Senators have failed to find consensus on how to pay for repeal or modification.
Senate Committee on Small Business and Entrepreneurship Ranking Member Sen. Olympia Snowe (R-ME) criticized the Small Business Administration (SBA) for failing to comment on how new Form 1099 reporting requirements will impact small businesses.
In an October 5 letter to Dr. Winslow Sargeant, Small Business Administration Chief Counsel for Advocacy, Sen. Snowe requested a specific plan for how his office will address the 1099 issue to mitigate unwarranted impact on small businesses.
Also on October 5, Rep. Sam Graves (R-MO), ranking member of the House Small Business Committee, sent a follow-up letter to IRS Commissioner Douglas Shulman asking for details on how the IRS plans to implement the new reporting requirements. Rep. Graves said he had asked Shulman in June for a response on the 1099 issue, but has not yet received an answer.
Grandfathered Rules:
On September 29, the Senate voted (40 to 59) to block a Congressional resolution offered by Sen. Mike Enzi (R-WY) that would have overturned the Administration’s regulations on what constitutes a grandfathered health insurance plan. The vote was partisan. Democrats defended the grandfather rules as protection of consumers against significant changes in existing health insurance coverage.
Republicans argued the rules are too strict, amounting to a breach of President Obama’s promise to let people who like their existing insurance keep it if they choose.
Loss of grandfather status means a health plan will have to comply with the new insurance reforms and other rules of the Patient Protection and Affordable Care Act.
NAIFA has encouraged the departments of Health and Human Services (HHS), Labor (DOL) and Treasury to reconsider the current guidance regarding permissible cost-sharing changes and offered clarifications on particular areas to provide individuals, families, and employers with additional flexibility to preserve their grandfathered plans as affordable coverage options.
NAIFA Staff Contact: Diane Boyle, Vice President – Federal Government Relations, at (703) 770-8252.
