On October 13, 2009, the Senate Finance Committee approved its version of healthcare reform legislation, the America’s Healthy Future Act, by a vote of 14-9. Only one Republican, Sen. Olympia J. Snowe (R-ME), voted to pass the bill out of committee. The legislation, whose stated purpose is to provide a “high-performing health care system [that] would guarantee all Americans affordable, quality coverage no matter their age, health status, or medical history,” contains numerous provisions that would directly impact employers. 

If enacted, the America’s Health Future Act would limit the ability of midsize and large employers with group health plans to impose annual and lifetime limits on coverage, would require such employers to provide first-dollar coverage for preventive care, and would require them to cap out-of-pocket health care costs.  Additionally, although the bill does not require employers to offer health insurance, effective July 1, 2013, employers with more than 50 employees that do not offer health insurance coverage would be required to reimburse the government for tax credits and subsidies provided to employees who purchase individual health insurance coverage.  The costs to employers that do not offer health insurance coverage would be up to $400 per year for each full-time employee.

Under the bill, small businesses with between 10 and 20 employees would be eligible for a new tax credit if they contribute at least 50 percent of the cost of their employees’ health insurance premiums. In 2011 and 2012, eligible employers could receive a credit for up to 35 percent of their contributions. In 2013, they could be eligible to receive a tax credit for two years that covers as much as 50 percent of their contributions if certain conditions are met. Small businesses with 10 or fewer employees and with average taxable wages of $20,000 or less would be able to claim the full credit amount.  The credit would begin to phase out for business with more employees and higher taxable wages, with a complete phaseout for businesses with 25 employees or average taxable wages of $40,000. Non-profit organizations with 25 or fewer employees would also be eligible to receive the tax credits if they meet the same requirements. Those organizations would be eligible for a 25-percent credit in 2011 and 2012, and a 35-percent credit thereafter. 

The Finance Committee’s bill must now be combined with legislation previously approved by the Senate Health, Education, Labor and Pensions (HELP) Committee in July before it can head to the Senate floor for a vote. The HELP bill is different in many respects than the bill passed by the Finance Committee.  The HELP bill, for example, would require employers with more than 25 employees to offer health coverage to those employees and pay at least 60 percent of the premiums, or pay $750 for each uninsured full-time employee and $375 for each part-time employee who is not offered coverage.