The U.S. Senate voted April 5 to repeal an unpopular health reform law provision that would have expanded IRS reporting requirements for businesses. The bill, approved by the House in March, moves now to President Obama, who has said he will sign it.
The tax-reporting mandate was intended to capture lost tax revenue to help pay for the health care reform law. It would have required businesses to file IRS Form 1099 for every business-to-business transaction totaling over $600.
Business groups, including the Property Casualty Insurers Association of America (PCI) and the National Federation of Independent Business (NFIB), sharply criticized the provision as overly burdensome for small businesses.
"NFIB and its members are glad to finally see this ill-conceived rule removed from the books by Congress," NFIB Senior Vice President of Federal Public Policy Susan Eckerly said in a statement.
Unlike other attacks on the health reform legislation, the repeal attracted bipartisan support. Still, Families USA, a national consumer health care advocate, criticized how the repeal will be funded. Under the bill, consumers who qualify for subsidies to buy health insurance in 2014 will have to repay the entire amount of credits they receive if their income unexpectedly changes and pushes them above the eligibility limits, even by $1.
"Although we recognize that Congress needs to repeal the 1099 reporting requirement so that it is no longer a distraction from the way the Affordable Care Act benefits millions of small businesses, funds intended to help America's middle class families should not be used as a piggy bank to mend this legislative problem," Families USA Executive Director Ronald Pollack stated in a letter to the Senate.