Led by Sen. Mike Johanns (R-Neb), the Senate passed legislationrepealing the much-criticized 1099 reporting provision in thehealthcare-reform law and sent the bill to President Obama for hissignature.

The bill passed the House early in March.

Obama is expected to sign the legislation despite concernsraised by the president and other Democrats that the "pay-for" is a$25 billion tax on the middle class.

The bill, H.R. 4, would pay for the repeal by making consumersrepay all of their insurance subsidies under the healthcare lawonce their income rises beyond 400 percent of the federal povertyline. House Democrats call that a tax increase on the middle class,and the administration agreed in a policy statement disclosed April5.

Senate Democrats tried to strip this provision from the bill butfailed by a 41-58 vote.

The bill itself passed the Senate 87-12.

The 1099 provision would have raised $19 billion to help pay forhealthcare reform.

It would have required business owners starting in 2012 to filea tax-reporting document for all vendors from which they buy $600worth of goods or services within a year.

Insurance industry trade groups lauded the decision.

Jimi Grande, National Association of Mutual Insurance CompaniesSVP of federal and political affairs, says Obama should "waste notime in signing H.R. 4 into law. The president has called the 1099reporting requirement a 'flaw' in the healthcare law, and he nowhas the opportunity to fix it."

Ben McKay, Property Casualty Insurers Association of Americasenior vice president of federal government relations, says, "Weare pleased that Congress has made this a priority in 2011 and urgePresident Obama to sign the legislation to prevent broad-ranging,unintended consequences."

Robert Rusbuldt, Independent Insurance Agents and Brokers ofAmerica president and CEO, says, "Our thousands of small-businessmembers and their clients will breathe easier knowing thisill-advised provision will not take effect."

Mike Becker, National Association of Professional InsuranceAgents director of federal affairs, said, "The Senate's vote torepeal the expanded 1099 requirement represents a victory forAmerica's businesses, especially small businesses, which would havebeen adversely affected by an overwhelming, onerous reporting andpaperwork burden."

The legislation also repeals an additional Form 1099information-reporting requirement imposed on owners of rental realestate.