Senate, House health care proposals compared

Tuesday, December 8, 2009 | 12:01 a.m. CST; updated 8:45 a.m. CST, Tuesday, December 8, 2009

Senate bill

Employer mandate: Businesses with more than 50 employees that have at least one full-time employee will be taxed per full-time employee if they do not offer a health insurance plan. The amount of the tax will depend on the size of the business and the number of full-time employees.

The bill will:

  • Exempt employers with 50 or fewer employees
  • Require employers with more than 200 employees to automatically enroll them into health insurance plans. Employees may opt out of coverage.

Tax credits: The bill proposes to provide tax credits for employers who offer health insurance if they have 25 or fewer workers and an average annual employee salary of $40,000 or less.

Companies with 10 or fewer workers and average wages of less than $20,000 would receive the full tax credits, worth 50 percent of premium costs.

(Effective 90 days following enactment through January 1, 2014.)

New taxes: The bill imposes a 40 percent excise tax on high-cost insurance plans that cost more than $8,500 for individuals and $23,000 for families to help pay to expand coverage to 31 million uninsured people. The tax would be levied on the “excess benefit.” The bill would also:

  • Increase the Medicare payroll tax rate for individuals with annual incomes over $200,000 and couples over $250,000 to 1.95 percent from 1.45 percent.

Health care exchanges: The bill will create an American Health Benefit Exchange and a Small Business Health Options Program Exchange for individuals and small businesses and provide oversight of health plans with regard to the new insurance market regulations, consumer protections, rate reviews, solvency, reserve fund requirements, premium taxes and to define rating areas.

This option initially will be open to employers with 50 or fewer employees.

The exchanges would have a public option. But unlike the House plan, states could pass legislation to opt out of offering a public option.

House bill

Employer mandate and tax increases: The legislation requires employers with annual payrolls of $500,000 or more to provide health insurance to their employees or pay a payroll tax of up to 8 percent. This is effective Jan. 1, 2013.

Employers also could face this tax even if they offer insurance. If their coverage isn’t affordable to low-wage workers, these individuals could obtain government-subsidized coverage through the exchange, and the employer would be taxed to help pay for this coverage.

The bill will:

  • Require employers to offer coverage to their employees and contribute at least 72.5 percent of the premium cost for single coverage and 65 percent of the premium cost for family coverage of the lowest-cost plan that meets the essential benefits package requirements or pay 8 percent of payroll into the Health Insurance Exchange Trust Fund.
  • Eliminate or reduce the pay or play assessment for small employers with annual payroll of less than $750,000:
  • Annual payroll less than $500,000: exempt
  • Annual payroll between $500,000 and $585,000: 2 percent of payroll;
  • Annual payroll between $585,000 and $670,000: 4 percent of payroll;
  • Annual payroll between $670,000 and $750,000: 6 percent of payroll.

Neither of the current health care bills address contract workers.

Tax credit: The House Leadership Bill proposes to give select small business owners tax credits for two years. The provisions are effective Jan. 1, 2013. The bill will:

  • Provide small employers with fewer than 25 employees and an average employee wage of less than $40,000 with a health coverage tax credit for up to two years. The small businesses who are members of the Columbia Chamber of Commerce have 20 or fewer employees.
  • Provide the full credit of 50 percent of premium costs paid by employers to employers with 10 or fewer employees and average annual wages of $20,000 or less. The credit phases out as firm size and average wage increases.
  • Not provide tax credits to employees earning more than $80,000 per year.

Health care exchanges: The proposed insurance exchanges would become operational in 2013 and allow individuals and businesses to compare and buy insurance plans, including a government-run plan. In the first year, businesses with fewer than 10 employees would be able to buy plans through the exchange. In the second year, firms with 20 employees or fewer could purchase insurance through the exchanges. That would increase to 50 employees in 2014 and 100 employees in 2015.

The bill proposes to:

  • Create a federal health insurance exchange.
  • Make it possible for states or regions of the country to create their own exchanges.
  • Help small businesses through the Small Business Administration to provide health insurance through the federal exchange with counseling, funds and technical assistance.

This plan would revise the rates the government pays to hospitals and other health care providers, instead of paying Medicare rates, which are lower than the rates that private insurers pay providers. The public plan’s costs would be covered by the premiums it charges.

One of the plans in the exchange would be a government plan.

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