House Committee Votes For 1099 Repeal

They are running into complaints from Democrats in both the House and Senate that they are unfair because they would increase the maximum amount the government could recapture from individuals who receive subsidies on their health care costs when purchasing through the exchange system, but who are later determined not to be eligible for the subsidies.

The Senate earlier passed legislation, attached to an aviation bill, which would pay the $21 billion cost over 10 years to repeal the 1099 reporting provision by authorizing the Office of Management and Budget to identify unobligated funds for elimination.

Following the House committee action, the National Association of Mutual Insurance Companies lauded the move, which it called an "important first step toward rescuing small businesses across America from an avalanche of red tape."

At the same time, Jimi Grande, NAMIC senior vice president of federal and political affairs at NAMIC, said there is more to be done.

"There is support for repealing this onerous provision on both sides of the aisle in both chambers and in the White House," he said. "Now is the time to get this repeal done."

Because of concerns voiced by Democrats, the bill reported out by the committee contained an offset that reduces improper overpayment of subsidies under the health exchange system.

The revised bill was aimed at eliminating a $21.9 billion deficit over 10 years, projected to occur because of the end of the proposed reporting requirements.

Because of the offset, the deficit will be reduced by $166 million over the same period, according to data supplied by the House Ways and Means Committee staff.

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

The bill is different than that passed by the Senate several weeks ago.

The first bill, H.R. 4, as introduced by Rep. Dan Lungren, R-CA, would repeal only those particular 1099 reporting requirements on small businesses, and it contains no offsets.

But the recent bill, H.R. 705, contained the deficit-reducing and the repeal of the real estate reporting provisions. It was approved, 21-15.

The committee then moved to incorporate H.R. 705 into H.R. 4, the bill that will now go to the floor for action.

Corrected to show the bill was reported out of the House Ways and Means Committee, not the House Judiciary Committee.

Updated with action from the Senate.