Changes to Health Care Law Would Reduce Burden for Employers

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On November 16, Sen. Max Baucus (D-MT), chair of the Senate Finance Committee, introduced the Small Business Paperwork Relief Act (S. 3946), which would repeal the Affordable Care Act’s expanded Form 1099 reporting requirement, set to take effect January 1, 2012.

At present, businesses are required to file 1099 forms for purchases of services of $600 or more each year from unincorporated businesses such as sole proprietorships, according to Medscape Medical News. The health care bill extends this requirement to cover purchases of property and goods in addition to services from all businesses, including corporations, MMN reported.

“Businesses … across the country have made it clear that expanded Form 1099 reporting is not something they can handle,” Sen. Mary L. Landrieu (D-LA), the bill’s co-sponsor and chair of the Senate Committee on Small Business and Entrepreneurship, said in a statement. “Placing another regulatory burden on the very businesses that we are counting on to create jobs is just not smart. We have taken some important steps this year to improve the economic outlook for small businesses. I am committed to reducing regulatory burden for them when I can.”

In related news, the Department of Health and Human Services issued an amendment to the health care reform law to allow employers to keep their insurance plan’s “grandfathered” status when switching insurance companies, as reported by the Society for Human Resource Management.

The Affordable Care Act stipulates that most insurance plans must provide for free preventive care and give those who are insured new powers to appeal coverage denials, but businesses did not have to meet those requirements so long as they didn’t make significant changes to their health care plans or change carriers. The Wall Street Journal noted that the law presented employers “with a dilemma: keep their current plan and swallow sharply rising premiums, or switch plans and be forced to add all the new benefits.” Under the amendment issued on November 15, employers can now retain their grandfathered status even if they change plans so long as they do not significantly cut benefits or increase costs for enrollees.

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