Led by Sen. Mike Johanns (R-Neb), the Senate passed legislation repealing the much-criticized 1099 reporting provision in the healthcare-reform law and sent the bill to President Obama for his signature.

The bill passed the House early in March.

Obama is expected to sign the legislation despite concerns raised 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 consumers repay all of their insurance subsidies under the healthcare law once their income rises beyond 400 percent of the federal poverty line. House Democrats call that a tax increase on the middle class, and the administration agreed in a policy statement disclosed April 5.

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

The bill itself passed the Senate 87-12.

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

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

Insurance industry trade groups lauded the decision.

Jimi Grande, National Association of Mutual Insurance Companies SVP of federal and political affairs, says Obama should "waste no time in signing H.R. 4 into law. The president has called the 1099 reporting requirement a 'flaw' in the healthcare law, and he now has the opportunity to fix it."

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

Robert Rusbuldt, Independent Insurance Agents and Brokers of America president and CEO, says, "Our thousands of small-business members and their clients will breathe easier knowing this ill-advised provision will not take effect."

Mike Becker, National Association of Professional Insurance Agents director of federal affairs, said, "The Senate's vote to repeal the expanded 1099 requirement represents a victory for America's businesses, especially small businesses, which would have been adversely affected by an overwhelming, onerous reporting and paperwork burden."

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