All I Want for Christmas Is. . .Healthcare Legislation?

AP – Senate Majority Leader Harry Reid, D-Nev., left, talks with staff.

Early this morning, by a vote of 60-40, the Senate moved its healthcare reform Bill forward.  The next vote will be tomorrow morning (12/22) at 7:20 am.  Following that vote, the Senate Bill will need to be merged with the previously passed House Bill.  The following is a Side-By-Side Comparison of the House and Senate Bills.  Below are some key areas for individuals and employers to be aware of:

Individual mandate:

House Bill – H.R. 3962

• Require individuals to have “acceptable health coverage”. Those without coverage pay a penalty of 2.5% of their adjusted income above the filing threshold up to the cost of the average national premium for self-only or family coverage under a basic plan in the Health Insurance Exchange.  Exceptions granted for those with incomes below the filing threshold (in 2009 the threshold for taxpayers under age 65 is $9,350 for singles and $18,700 for couples), religious objections and financial hardship.  (Effective January 1, 2013)

Senate Bill – H.R. 3590

• Require U.S. citizens and legal residents to have qualifying health coverage. Those without coverage pay a tax penalty of $750 per year up to a maximum of three times that amount ($2,250) per family. The penalty will be phased-in according to the following schedule: $95 in 2014; $350 in 2015; and $750 in 2016. Beginning after 2016, the penalty will be increased annually by the cost-of-living adjustment.  Exemptions will be granted for financial hardship, religious objections, American Indians, those without coverage for less than three months, undocumented immigrants, incarcerated individuals, if the lowest cost plan option exceeds 8% of an individual’s income, and if the individual has income below 100% of the poverty level.

Employer requirements:

House Bill – H.R. 3962

• Require employers to offer coverage to their employees and contribute at least 72.5% of the premium cost for single coverage and 65% of the premium cost for family coverage of the lowest cost plan that meets the essential benefits package requirements or pay 8% of payroll into the Health Insurance Exchange Trust Fund. (Effective January 1, 2013)

• 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% of payroll;
– Annual payroll between $585,000 and $670,000: 4% of payroll;
– Annual payroll between $670,000 and $750,000: 6% of payroll.  (Effective January 1, 2013)

• Require employers that offer coverage to automatically enroll into the employer’s lowest cost premium plan any individual who does not elect
coverage under the employer plan or does not opt out of such coverage. (Effective January 1, 2013)

• Require a government study of the impact of employer responsibility requirements and recommend to Congress whether an employer hardship exemption is appropriate. (Report due January 1, 2012)

Senate Bill – H.R. 3590

• Assess employers with more than 50 employees that do not offer coverage and have at least one full-time employee who receives a premium tax credit a fee of $750 per full-time employee. Employers with more than 50 employees that offer coverage but have at least one full-time employee receiving a premium tax credit, will pay the lesser of $3,000 for each employee receiving a premium credit or $750 for each full-time employee. For employers that impose a waiting period before employees can enroll in coverage, require payment of $400 for any full-time employee in a 30-60 day waiting period and $600 for any employee in a 60-90 day waiting period. (Effective January 1, 2014)

• Exempt employers with 50 or fewer employees from any of the above penalties.

• Require employers with more than 200 employees to automatically enroll employees into health insurance plans offered by the employer.  Employees may opt out of coverage.

Individual mandate • Require individuals to have “acceptable health coverage”. Those without
coverage pay a penalty of 2.5% of their adjusted income above the filing
threshold up to the cost of the average national premium for self-only
or family coverage under a basic plan in the Health Insurance Exchange.
Exceptions granted for those with incomes below the filing threshold
(in 2009 the threshold for taxpayers under age 65 is $9,350 for singles
and $18,700 for couples), religious objections and financial hardship.
(Effective January 1, 2013)
• Require U.S. citizens and legal residents to have qualifying health
coverage. Those without coverage pay a tax penalty of $750 per year
up to a maximum of three times that amount ($2,250) per family. The
penalty will be phased-in according to the following schedule: $95
in 2014; $350 in 2015; and $750 in 2016. Beginning after 2016, the
penalty will be increased annually by the cost-of-living adjustment.
Exemptions will be granted for financial hardship, religious objections,
American Indians, those without coverage for less than three months,
undocumented immigrants, incarcerated individuals, if the lowest cost
plan option exceeds 8% of an individual’s income, and if the individual has
income below 100% of the poverty level.
Employer requirements • Require employers to offer coverage to their employees and contribute
at least 72.5% of the premium cost for single coverage and 65% of the
premium cost for family coverage of the lowest cost plan that meets the
essential benefits package requirements or pay 8% of payroll into the
Health Insurance Exchange Trust Fund. (Effective January 1, 2013)
• Assess employers with more than 50 employees that do not offer
coverage and have at least one full-time employee who receives a
premium tax credit a fee of $750 per full-time employee. Employers
with more than 50 employees that offer coverage but have at least one
full-time employee receiving a premium tax credit, will pay the lesser of
$3,000 for each employee receiving a premium credit or $750 for each
full-time employee. For employers that impose a waiting period before
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