Dissecting the healthcare reform bill

Corey Connors, director of legislative relations at ANLA, offers this "nutshell" analysis of the new healthcare reform bill:

The “Patient Protection and Affordable Care Act” (PPACA) includes a “soft” employer mandate, in the form of penalties and fines, contained in the PPACA. It defines a small business has having 50 or fewer full-time employees, and imposes a penalty on employers with 50 or more workers that fail to provide coverage.

The PPACA language allows for businesses to go over the 50 employee limit for 120 days when using seasonal employees without triggering the mandate. The reconciliation bill (the Health Care and Education Affordability Reconciliation Act or HCEARA) would make a couple of changes to the PPACA if passed and enacted. Namely, the calculation for employers failing to meet their coverage obligation would be altered and amounts of the fines would be changed.

HCEARA would also add in a calculation for part-time employees for seasonal workers to count toward the number of employees in a given year.

To pay for this overhaul of the health reform system, a number of new taxes were included in the legislation. The PPACA increases the Medicare Hospital Insurance (HI) trust portion of the payroll tax for the employee’s share only. The employer would continue to pay to its current rate share on the employee’s wages. Since the HI applies only to earned income, the HCEARA would create a new “Unearned Income Medicare Contribution” (UIMC) tax. This would be calculated separately from the HI tax and would apply to “net investment income.”

PPACA would also impose an excise tax on health insurers and health plan administrators for coverage that exceeds certain thresholds. Finally, and perhaps most importantly to small businesses, the requirement for all vendors to file Form 1099 for all transactions was included in the PPACA and would not be altered in the HCEARA.
ANLA will continue to monitor developments related to federal health reform as the Senate begins consideration of HCEARA, and as PPACA is implemented into law.