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• All employers with more than 50 employees that do not offer coverage would be required to pay a fee for each employee who receives a tax credit for health insurance through a state health exchange. For each full time employee (defined as working 30 hours or more each week) receiving health coverage through a state exchange and receiving a tax credit, the employer would be required to pay a flat dollar amount set by the Secretary of Health and Human Services (HHS) and published in a schedule each year. The flat dollar amount would be equal to the national average tax credit. These payments would not be linked to the individual, but would be contributed to a general fund. The assessment would be capped for all employers at an amount equal to $400 multiplied by the total number of employees at the firm, regardless of how many are receiving the state exchange credit. Employers would be responsible for paying either the flat dollar amount multiplied by the number of full-time employees receiving a tax credit, or a fee of $400 per employee multiplied by the total number of full-time employees, whichever amount is smaller. The fees assessed for employees receiving premium credits would not be deductible for U.S. income tax purposes. These provisions would take effect as of July 1, 2013.
• The bill imposes an excise tax on insurers equal to 40 percent of the aggregate value of employer-sponsored health coverage that exceeds $8,000 for individual coverage and $21,000 for family coverage for the year 2013. The amount subject to the high-premium excise tax does not include fixed indemnity health coverage that is purchased by the employee with after-tax dollars.
• An amendment introduced by Sen. Blanch Lincoln (D-Ark.) would limit the amount insurance providers can claim in business tax deductions for executive compensation. Currently, businesses can deduct up to $1 million annually per executive-level employee. The amendment included in the healthcare reform bill would decrease the amount able to be deducted as a business expense to $500,000 annually. This limitation would apply to businesses that provide health coverage meeting the individual mandate requirements in the bill, and would not apply to sponsors of self-funded plans who are not otherwise insurance companies.

The Senate Finance Committee is expected to vote on this measure this week. If approved, the bill will need to be reconciled with the healthcare reform legislation approved by the other Senate Committees before a final version is brought to the Senate floor.

This entry was written by Jay Sumner.