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Health Care Reform

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Now that the House and Senate have passed bills to overhaul the nation’s health care system, the final phase of negotiations is underway to produce a unified, compromise bill. 

To review all of the key HR provisions in the House and Senate-passed bills, click HERE for an updated side-by-side chart.

At this stage in the legislative process, a formal “conference committee” comprised of a few members from the relevant House and Senate committees usually meets to reconcile differences between the respective chambers’ bills. 

However, the White House and Congressional Democrats have decided to bypass a “formal” conference committee in hopes of expediting an agreement on a final bill.  Instead, informal negotiations are underway among small groups of Senators and Representatives. 

Democratic leaders would like to send a bill to President Obama before the State of the Union address (expected to occur in early February).  This would allow the President to highlight a major “win” on his top domestic policy initiative. 


Deliberations are proving difficult because the House and Senate-passed bills differ in several key areas, including the creation of a public plan option, methods to finance the reforms, and abortion-related coverage.

The provisions regarding how to pay for health reform are especially important to the HR community.  For example:

  • The Senate bill includes a 40% tax on group health coverage in excess of $8,500 for single coverage and $23,000 for family coverage.  Both the White House and Senate Democrats support this “high value” health plan tax, but House Democrats, labor unions, and some large businesses oppose this provision.

  • A 0.9% increase in the Medicare Hospital Insurance payroll tax is also part of the Senate’s financing strategy. 

  • Both the House and Senate bills place caps ($2,500) on tax-free contributions to health Flexible Spending Accounts (FSAs) and prohibit FSA funds from being used for over-the-counter medications without a prescription.

  • The House bill largely finances health care through a 5.4% tax on Americans with income in excess of $500,000, which lacks support among Senate moderates. 

SHRM’s Position:

SHRM is currently preparing a letter to Congress that will explain SHRM’s priorities for a final bill.  In keeping with SHRM’s position on health care reform, the letter will focus on employer requirements, wellness provisions, and financing options, among other items. 

To read more about SHRM’s advocacy activities throughout this debate, go to the Health Care page located on the website, and access the links to a series of communications with Congress.

Stay tuned for further developments on how this legislation will impact HR professionals in upcoming issues of the HR Issues Updateand by attending SHRM’s 2010 Legislative Conference in March.


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The next issue of HR Issues Update will be published on Friday, January 29, 2010.
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