They're dropping like flies. Last week the Senate approved a bill that would eliminate the controversial 1099 provision from the Affordable Care Act, and just three days later another important piece of the legislation went down with Friday night's budget agreement. This time the "employee free choice" voucher program emerged in the cross-hairs.
This provision, set to go into effect in 2014, would have allowed lower-income workers to opt out of their company's health plan and use the employer contribution to buy individual coverage in the private market. Specifically, employees who'd spend between 8 percent and 9.8 percent of their income on their employer-sponsored coverage could choose to shop for a lower-priced plan through the new state-based health insurance exchanges, also scheduled to begin in 2014.
While this sounds somewhat similar to the school voucher programs that have been a topic of debate for the past several years – the state of Pennsylvania, in fact, is considering a bill this week that would send low-income children to schools outside their districts – this time it was the Republicans who found themselves opposed to "free choice."
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The controversial part of this now-dead provision is that employees who purchase a plan that's less costly than the employer's contribution amount would be able to pocket the difference – the excess contribution would become taxable income to the employee.
In the employer presentations I've done over the past several months, as I mentioned in last week's post, the 1099 provision caused the most uproar among business owners. The free choice voucher program was a close second – employers really hated this requirement. But now, with these two pieces of the legislation gone, health reform just became a little more palatable.
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