House Passes Landmark Health Care Reform Bill

On Saturday, November 7, the House of Representatives by a vote of 220-215 approved H.R.3962, the Affordable Health Care for America Act. Only one Republican, Rep. Joseph Cao (R-LA) voted for passage of the bill. The House bill faces tough opposition in the Senate, which is considering its own version of health care reform.

Included among the many tax changes in the health care reform bill OK'd by the House are: a 5.4% surtax on AGI over $500,000 ($1 million for joint filers); a tax on individuals who don't have acceptable health care coverage; a change preventing nontaxable reimbursements from health flexible spending accounts, health reimbursement arrangements, and health savings accounts for a medicine or drug unless it is prescribed or is insulin; a $2,500 cap on health flexible spending arrangements in cafeteria plans; a boost in the penalty for nonqualified distributions from health savings accounts to 20%; a tax on certain medical devices; information reporting for payments to corporations; repeal of worldwide interest allocation; codification of the economic substance doctrine; and exclusion of unprocessed fuels from the cellulosic biofuel producer credit.

The text of H.R. 3962 is at http://www.house.gov/rules.

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