Health Care Bill Approved by House Committees

A 1,990-page national health care reform bill has been posted on the Internet (http://docs.house.gov/rules/health/111_ahcaa.pdf); a vote on it in the House is expected in the first week of November. Tax measures in this bill include:

• A surtax on high-income taxpayers. Singles with income over $500,000 and joint filers with income over $1 million would pay a 5.4% on modified adjusted gross income over these limits (in addition to regular income tax on these amounts).
• A 2.5% surtax on modified adjusted gross income of anyone who failed to purchase health coverage.An 8% payroll tax on employers who fail to offer health coverage (lower rates for small employers).
• A tax credit for small employers (fewer than 25 employees) of as much as 50% of the cost of health insurance premiums paid for staff.
• Elimination of over-the-counter medications from reimbursable amounts under health savings accounts (HSAs), flexible spending accounts (FSAs), and Archer medical savings accounts (MSAs).
• Increase in the penalty to 20% (up from the current 10%) for nonmedical withdrawals from HSAs.

What’s Next?

If there is a successful vote in the House and if the Senate passes its own version of health care reform, then a conference committee made up of members from other houses of Congress would have to work out differences to present a single measure to both houses for a final vote. No one can predict the outcome at this time.