Supreme Court rejects request to hear Va. health care case

WASHINGTON —The Supreme Court rejected a request Monday by Virginia officials to hear the constitutionality of the federal health-care overhaul, ensuring that the legal battle over the Obama-sponsored law will play out first in lower courts.

The high court's order in Virginia v. Sebelius was issued with no recorded vote or public dissent. It would have been highly unusual for the justices to taken up the dispute without at least one lower appeals court ruling first.

The high court's resolution of the law that continues to divide congressional Republicans and Democrats would now likely come in mid-2012, rather than the middle of this year.
The high court's order in Virginia v. Sebelius was issued with no recorded vote or public dissent. It would have been highly unusual for the justices to taken up the dispute without at least one lower appeals court ruling first. In the few instances when the justices have intervened early, it has been on a matter of imperative public importance and urgency, such as in the 1974 case involving President Nixon's Watergate tapes.

Virginia Attorney General Ken Cuccinelli had urged the justices to step in to resolve conflicting trial court opinions on the constitutionality of the provision that requires, beginning in 2014, that people buy insurance coverage or face a tax penalty.

Lower U.S. district courts have split on whether Congress had the authority to pass the individual-insurance mandate included in the legislation that became law in March 2010. Appeals of those rulings are pending in several U.S. circuit courts of appeals, which is the second step of the three-tier federal judiciary.

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Obama signs bill repealing health care reform vouchers

WASHINGTON—President Barack Obama has signed into law a bill that repeals a health care reform law provision that would have required employers to offer low-wage employees company-paid vouchers to buy coverage in state health insurance exchanges.

The voucher repeal provision is part of an appropriations measure, H.R. 1473, that the president signed Friday after final congressional passage of the bill.

The voucher provision, which Sen. Ron Wyden, D-Ore., backed when the health care reform legislation was working its way through Congress, prompted strong opposition from business groups, which said it would boost employer costs and add administrative complexity.

Under the provision, employers starting in 2014 would have been required to offer vouchers to employees with household incomes up to 400% of the federal poverty level and whose premium contributions were between 8% and 9.8% of their household income.

The value of the voucher, though, would have been equal to what their employer would have paid if the employee enrolled in a plan with the largest employer premium contribution. Employees then could have used the voucher to buy coverage in an exchange and keep the difference in cash if the plan they purchased cost less.

Obama signs 1099 fix bill

President Obama has signed H.R. 4 – a bill that will repeal the Form 1099 reporting provision created by Patient Protection and Affordable Care Act (PPACA) Section 9006 – into law.

If PPACA 9006 Section 9006 had taken effect as written, it would have required a business entity to file a 1099 miscellaneous income reporting form with the Internal Revenue Service for a vendor whenever it had $600 or more in transactions with that vendor in a given tax year.
The provision would have taken effect in January 2012.

Small business groups had argued that the provision would create a paperwork nightmare, forcing independent contractors to file a Form 1099 whenever they bought a computer or a suite of office furniture from a large retailer.

The new law created by H.R. 4, the “Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011,” also repeals a separate Form 1099 information reporting requirement that would have been imposed on owners of rental real estate.

Analysts have estimated repeal of PPACA Section 9006 will cost $19 billion over 10 years. Drafters of the repeal law have paid for repeal by adjusting a PPACA health insurance subsidy program that is set to start up in 2014.

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The IRS releases interim guidance on W2 reporting requirements

The Internal Revenue Service has issued interim guidance to employers on the informational reporting requirements on each employee's annual Form W-2 of the cost of the health insurance coverage they sponsor for employees. The IRS is also asking for comments on the interim guidance. The IRS emphasized that the new reporting to employees is for their information only, to inform them of the cost of their health coverage, and does not cause excludable employer-provided health coverage to become taxable; employer-provided health coverage continues to be excludable from an employee's income, and is not taxable. To view the guidance click here

U.S. Senate votes to repeal 1099 reporting requirement

WASHINGTON (Reuters)—Bowing to pressure from business groups worried about an avalanche of paperwork, the U.S. Senate voted Tuesday to rescind the Form 1099 tax reporting requirement included in last year's health care overhaul law. With bipartisan support, the Senate voted 87-12 to pass legislation sponsored by Sen. Mike Johanns, R-Neb., that repeals a requirement for businesses and landlords to file a Form 1099 document with the Internal Revenue Service for purchases of goods and services exceeding $600 a year. The tax filing requirement did not directly relate to health care but was intended to help pay for the health care law that is considered one of President Barack Obama's top legislative achievements. The legislation earlier was passed by the House of Representatives and now goes to President Obama, who is expected to sign it into law. It was approved in Congress despite concerns by some Democrats to the way the $22 billion cost to the U.S. Treasury of repealing the tax reporting provision is covered. The bill adjusts the health insurance tax subsidies to be given to middle-income people under the health care law. It would require anyone who receives excessive tax subsidies for health insurance to pay back a greater share than currently required under the law. The Form 1099 reporting provision was meant to improve tax compliance and help pay for the health care law. But small firms and the self-employed complained it would bury them in paperwork. Lawmakers in both parties agreed that the tax reporting requirement should go. To view the full artcile click here.

House Committee Bill Would Restrict Funding for State-Based Exchanges

The ability of the Obama administration to provide unlimited funds to states to establish health exchanges would be ended under legislation reported out by a House committee late Tuesday. The House Energy & Commerce Committee legislation, H.R. 1213, would strike the unlimited direct appropriation of funds provided under the healthcare reform law for creation of state-based exchanges. The bill would also order that unspent money in the hands of the Department of Health and Human Services to provide funds to the states be returned to the Treasury. The bill is among five bills that would rescind authority to fund the law, the Patient Protection and Affordable Care Act. Rep. Fred Upton, R-Mich., chairman of the panel, says the committee passed the bills to “limit the Department of Health and Human Services’ unprecedented power, and restore Congress’ fiduciary duty as representatives of the people.” To view the full article click here.