Focus: Senate Repeals Onerous 1099 Requirement in Health Care Law

NAM Capital Briefing.....Excerpt

Although the Senate failed on Wednesday, February 2, to repeal the 2010 Patient Protection and Affordable Care Act, senators voted 81-17 to repeal the burdensome 1099 provision in the health care law. Under the new IRS reporting requirement, beginning in 2012, all businesses will have to file a 1099 form with the IRS for all purchases of property and services that cost over \$600. Previously, businesses have only reported purchases of services from non-corporate businesses. This costly and burdensome requirement would represent a significant compliance problem for businesses of all sizes, and the NAM has been steadfast in its opposition to this onerous rule. In a statement following the vote, NAM Senior Vice President for Policy and Government Relations Aric Newhouse said, “Manufacturers are pleased that the Senate has voted to wisely lift one of the many regulatory and policy burdens imposed on employers as part of the health care bill. This is an important first step and, we hope that the House will soon follow suit so that full repeal of the 1099 burden can be signed into law.” The larger vote to repeal both the Patient Protection and Affordable Care Act and health care-related provisions in the 2010 budget reconciliation law, introduced by Senator McConnell (R-KY), was defeated along party lines, 47-51. The NAM notified senators that all votes on Senate Amendment 13 would be designated for consideration as Key Manufacturing Votes in the 112th Congress. Additionally, on January 31, U.S. District Judge Roger Vinson ruled that the legislation is unconstitutional because its “individual mandate” that requires individuals to purchase insurance by 2014 violates the Commerce Clause. The U.S. Department of Justice will appeal the ruling to the 11th Circuit Court of Appeals, and will likely ask the court to stay the effects of the ruling pending appeal. According to the Wall Street Journal, the 26 states that are party to the lawsuit are now considering whether ask the Supreme Court to step in a make a ruling now, rather than let the matter work its way through the lower courts. The ruling has thrown into flux the process of implementing the health care law at the state level. Some states, such as Florida, have decided that they can immediately stop implementing the law, while others are continuing to move forward with implementation. Some two dozen lawsuits have been filed in federal courts since the law was passed last March. Prior rulings have deemed the individual mandate unconstitutional but have let the rest of the law stand. If the Vinson case is not heard by the U.S. Supreme Court, one or more of these other cases is expected to be. “Health care legislation passed in 2010 will drive up manufacturers’ health care costs and force many companies to consider abandoning the generous benefits they currently offer. Our nation can and must do much better at finding a health care solution, and the 2010 legislation must be repealed,” said Newhouse in a letter to all senators. {Back to top}