House To Consider Plan To Offset Cost of 1099 Tax-Reporting Repeal
On Thursday, the House Ways and Means Committee is expected to consider a new proposal by Chair Dave Camp (R-Mich.) to offset the cost of repealing the 1099 tax-reporting requirement in the federal health reform law, CQ Today reports.
Camp intends to add the proposal as a substitute amendment to legislation (HR 4) that would repeal the 1099 provision. The measure, which would add an estimated $21.9 billion to the federal deficit over a decade, currently does not include any offsets (Ethridge, CQ Today, 2/15).
The tax-reporting requirement -- which is scheduled to take effect in 2012 -- requires businesses, not-for-profit groups and government offices to file 1099 forms with the Internal Revenue Service when they purchase $600 or more in goods or services from another business in a given year. The law previously required 1099 forms only for services above that amount (California Healthline, 2/3).
Details of House Proposal
The new proposal would offset the cost of the 1099 repeal by changing a reform law provision to allow the federal government to recapture more overpayments to consumers who purchase health coverage through state-based health insurance exchanges, regardless of if the overpayments were made because of changes in income or by accident (CQ Today, 2/15).
Earlier this month, the Senate approved an amendment to repeal the 1099 provision, which would offset the lost revenue by requiring the Office of Management and Budget to rescind $44 billion in appropriated but unspent discretionary funds from various sources (California Healthline, 2/3).
A Senate aide said Democratic senators likely will prefer their own financing strategy for repealing the requirement, suggesting that the new proposal might not be popular outside of the House.
However, a spokesperson for Sen. Mike Johanns (R-Neb.) said both chambers' top priority should be eliminating the mandate, regardless of how the strategy is funded (CQ Today, 2/15).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.