Recently the House Ways and Means Committee reviewed and approved 11 health care related bills, which will now make their way to the House floor.
Among the bills that were voted out of the Committee was the Employer Relief Act of 2018 (H.R. 4616), which would retroactively suspend the ACA’s employer mandate penalties for the 2015 through 2018 tax years. The bill would also delay the Cadillac tax for another year until 2023. According to the Joint Committee on Taxation (JCT), if passed in its current form, the Employer Relief Act would cost $39.5 billion over 10 years. This price tag could get even bigger if, as Ways and Means Committee Chairman Kevin Brady predicted it might, the bill gets amended to also include a repeal of the medical device tax.
Also approved were a number of bills relating to health savings account (HSAs) and other tax-favored accounts, like health reimbursement arrangements (HRAs) and flexible spending arrangements (FSAs). These included H.R. 6306, which would increase the annual contribution limits for HSAs from $2,250 to $5,000 for self-only coverage (or from $4,500 to $10,000 for family coverage) and allow both spouses to make catch up contributions to the same HSA. The bi-partisan H.R. 6199, which would expand the list of allowable items which can be paid by tax favored health accounts to include the purchase of over the counter medications and menstrual care products, was also approved.
Delay to Proposed Regulations on Section 199a
The IRS has stated that regulations interpreting Section 199A [which provide pass-through entities with a new 20 percent deduction on “qualified business income” under certain circumstances] is one of its top priorities with respect to rolling out regulations to implement the 2017 Tax Cuts and Jobs Act. However, this week it was announced that the release of proposed rules on Section 199A will be delayed until the end of July. Unfortunately, for the small businesses who are eagerly awaiting these rules, it is possible that we will see further delay in the release of the proposed rules which, even after they are released, will have a long way to go before they are finalized.
Tax Reform 2.0
House Ways and Means Committee Chairman Kevin Brady has announced that drafts of a package of new tax bills (referred to as “Tax Reform 2.0”) will be circulated around the House in the coming month and formally released in early August.
While it is yet unclear exactly what might be included in this package, there has been significant discussion about making the individual provisions of the 2017 Tax Cuts and Jobs Act (which are set to sunset at the end of 2025) permanent as well as some suggestions about further lowering the corporate tax rate (down to 20 percent for C corps). Given the high cost that would be associated with either or both of these proposals, it is probable that Congressman Brady and his committee will be looking for revenue raisers to include in the package.
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