1099 Repeal Signed Into Law

04.20.2011 - National Healthcare Reform

With an overwhelmingly bipartisan vote of 87-12, the US Senate on April 5, 2011 approved a measure repealing the so-called 1099 repeal from the year-old health reform law.  The 1099 provision would have required all businesses to file a 1099 reporting requirement with the IRS for all purchases over $600 in one year with any one vendor.
The repeal is the first provision of the Patient Protection & Affordable Care Act (ACA) to be reversed and will now head to the White House, where President Obama is expected to sign the bill into law despite concern over how the provision's repeal is being paid for.  Essentially, the measure changes how the federal government recaptures premium subsidy overpayments to individuals enrolled in states' health insurance exchanges if their income changes during the plan year.  Some policy observers are concerned that individuals may be less likely to obtain coverage through exchanges lest they be required to pay back a substantial portion of the subsidy dollars received, an amount to repay that may be unaffordable for most.  According to an analysis performed by the Kaiser Family Foundation, a family earning just under 400% of the federal poverty level could be required to pay back just over $11,000 if they become ineligible for subsidies during the year because of a life event such as a salary raise or bonus.
Senator Robert Menendez's (D-NJ) amendment that would have likely eliminated how the repeal is paid for was defeated 41-58 in a vote that took place shortly before the repeal vote.
House Republicans first tried reversing the 1099 provision in July 2010 and after at least 10 subsequent repeal efforts and explicit support from the White House, a version that originated in the House (H.R. 4) was sent directly to the President for his signature because no other changes were made to it in the Senate.   
President Obama signed the repeal into law on April 14, 2011.