May | June 2010 Health care bill signed


In late March, President Obama signed two Health Reform bills into law. The first bill, H.R. 3590, the “Patient Protection and Affordable Care Act” (PPA- CA) represented final passage of the earlier Senate- passed version of health coverage reform. Then, the Senate and House also passed H.R. 4872, the “Health Care and Education Affordability Reconciliation Act” (HCEARA) that contains various changes that the Obama administration and Congress sought to the Senate-passed version of health legislation.


In both H.R. 3590 and H.R. 4872, there are many is- sues of interest to the nursery & landscape industry. Though there is no explicit language regarding em- ployer mandates for health coverage, there are pen- alties and fines for not providing health coverage for employees that could be considered a “soft” mandate.


As previously reported, the Senate-passed version of health reform had exclusions for small business em- ployers, defining a small business has having 50 or fewer full-time employees. There was also a seasonal exemption included, which would allow for seasonal businesses to exceed the 50 employee limit for 120 days without triggering the coverage requirements. Passage of the reconciliation bill increased the ap- plicable payment amount for firms with more than 50 “full time equivalent” (30 hours or more) workers that do not offer coverage, to $2,000 per full-time employ- ee, up from $750 in PPACA. HCEARA would also allow employers with 50 or more FTE workers to sub- tract the first 30 full time employees from the payment calculation. For example, a firm with 51 workers that does not offer coverage will pay an amount equal to 51 minus 30, or 21 times the applicable per employee payment amount.


into law


In order to pay for the far-reaching overhaul and ex- pansion of the health reform system, a number of new taxes were included in the legislation. The PPACA increases the Medicare Hospital Insurance (HI) trust portion of the payroll tax for the employee’s share only. However, the HI applies only to earned income, so the HCEARA would create a new “Unearned In- come Medicare Contribution” (UIMC) tax.


This


would be calculated separately from the HI tax and would apply to “net investment income.” The rate for that tax will be 3.8%. Finally, and perhaps most importantly to small businesses, the requirement for all vendors to file Form 1099 for all transactions was included in legislation President Obama signed into law.


Looking ahead, it will take time for the air to clear on exactly what this legislation will mean for green in- dustry employers. For one thing, there will be months of regulation-writing and many provisions will not take effect for at least several years. The regulation period will allow for public comment. Less certain is whether a future Congress may act to alter at least some provisions of the ambitious law.


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