Senate Finance Committee Passes Health Legislation

Congress has been grappling with the issue of health care coverage in the United States for several months, and now the Senate Finance Committee has passed one version of health care reform. The bill would require individuals to have health coverage, personally or through an employer, or pay an annual penalty. The penalty would be an excise tax that they have set at $200 per year for individuals starting in 2014 and rising to $750 per year for individuals by 2017. Those who can’t afford coverage would be eligible for assistance (free or low-cost coverage) and would not be penalized.

Employers with 50 or more employees would be required to offer health coverage that meets certain minimum requirements or pay an additional payroll tax that will be used by the federal government to finance the $829 billion price tag for the program.

Small businesses (those with fewer than 25 employees) would be eligible for a federal tax credit to compensate them for providing health coverage to their staff.

The Senate bill does not include a surtax on higher-income individuals as a way to pay for the measure; the House Ways and Means bill has a 1% to 5.4% surtax on these individuals.

The bill is far from becoming law. There are several other versions in Congress; much compromise is needed before any final version will be enacted into law.