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House Committee Passes Obamacare Reconciliation Bill

by Mike Godfrey, Tax-News.com, Washington

30 September 2015


On September 29, the US House of Representatives Ways and Means Committee passed a "reconciliation" bill to repeal core parts of the Affordable Care Act (ACA), including the individual and employer mandates, the medical device tax, and the "Cadillac" tax.

A reconciliation bill can be passed through the US Senate by a simple majority vote, rather than the usual 60-vote threshold. Following the resolution passed by Congress earlier this year, the Ways and Means Committee is one of three House Committees charged with passing budgetary savings bills and forwarding them to the Budget Committee.

The Budget Committee will put the bills together into one unified reconciliation bill to be presented to the full House for approval in the near future, and then on to the Senate.

The provisions of the ACA to be repealed in the bill include the requirement that most Americans should maintain "minimum essential" health insurance coverage, while employers are also encouraged to offer that health coverage. Those individuals and employers who do not comply with these mandates – the "employee mandate" and "employer mandate" – are to make "shared responsibility" payments, or tax penalties, to the Internal Revenue Service.

The reconciliation bill would also eliminate Obamacare's 2.3 percent medical device tax, which is imposed on manufacturers and importers of devices such as artificial hips, MRI scanners, and cardiac defibrillators. The House passed a bill for its repeal in June this year by a bipartisan vote.

Repeal of the "Cadillac" tax has also recently become bipartisan policy. Legislation for repeal of the 40 percent tax on the "excess benefit" of high-cost health insurance plans paid for by employers in tax years beginning after December 31, 2017, has been introduced in both the Senate and the House of Representatives this year.

Following its passage, Ways and Means Committee Chairman Paul Ryan (R – Wisconsin) said: "This bill is a big step toward dismantling Obamacare. Through reconciliation, we have the opportunity to get a repeal bill not only through the House – but actually to the President's desk. By tearing down many of the worst parts of the law – like forcing people to buy insurance only to later tax them for it – we could stop Obamacare in its tracks."

However, even if the legislation is approved subsequently by both the full House and Senate, President Barack Obama would be certain to veto it if it was to reach his desk.

TAGS: individuals | tax | law | insurance | budget | excise duty | health care | legislation | United States | penalties

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