Healthcare reform proposals now circulating on Capitol Hill are full of provisions that will change U.S. tax law, according to a special tax report by the auditing and accounting firm CCH.
"If healthcare reform is enacted in any form, it will almost certainly include many changes to the tax laws scattered throughout the Internal Revenue Code," said Mark Luscombe, a CCH principal federal tax analyst.
CCH is owned by the Amsterdam-based global information services and publishing company Wolters Kluwer.
The CCH briefing notes that, based on a study of the different reform plans, individuals would be required to have health insurance and employers would be required to offer coverage that meets certain minimum standards, with the tax system used as an enforcement and collection mechanism for individuals and employers who do not obtain or offer coverage on their own.
Tax credits have been proposed to ease the financial burden on low-income individuals and small businesses.
One major revenue raiser to pay for the reform being considered in the House is a progressive surtax or "surcharge" on high-income individuals. The Senate is expected to propose an alternative to the surcharge.
In addition to the surcharge, the briefing reveals that other revenue raisers proposed include prohibiting the use of Flexible Spending Arrangements to pay for over-the-counter drugs, delaying the worldwide allocation of interest, codification of the economic substance doctrine and limiting the ability of foreign multinational firms to reduce U.S. tax liability through deductible payments to a tax treaty jurisdiction before repatriating earnings.
In addition, the briefing notes, a number of other possibilities, from modifying or repealing the itemized deduction for medical expenses to imposing an excise tax on sugar-sweetened beverages, have been discussed but not yet released in legislative language.
"Healthcare reform is certain to impact every business in the country, whether it's currently providing – or not providing – coverage to their employees," said Stephen Huth, managing editor of the Spencer's Benefits Reports research service produced by Wolters Kluwer Law and Business.
Several congressional committees – the House Ways and Means, House Education and Labor and the Senate Health, Education, Labor and Pensions Committees – have released different versions of America's Affordable Health Choices Act, H.R. 3200, with the Senate Finance Committee expected to release its version of the bill soon.