[House Report 114-656]
[From the U.S. Government Publishing Office]
114th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 114-656
======================================================================
TRIBAL EMPLOYMENT AND JOBS PROTECTION ACT
_______
July 5, 2016.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Brady of Texas, from the Committee on Ways and Means, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 3080]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 3080) to amend the Internal Revenue Code of 1986 to
provide an exception to the employer health insurance mandate
for Indian tribal governments and tribally owned businesses,
having considered the same, report favorably thereon with an
amendment and recommend that the bill as amended do pass.
CONTENTS
Page
I. SUMMARY AND BACKGROUND...........................................2
II. EXPLANATION OF THE BILL..........................................3
A. Exception to Employer Health Insurance Mandate for
Indian Tribal Governments and Tribally Owned
Businesses (sec. 2 of the bill and sec. 4980H of
the Code).......................................... 3
III. VOTES OF THE COMMITTEE...........................................6
IV. BUDGET EFFECTS OF THE BILL.......................................7
A. Committee Estimate of Budgetary Effects............. 7
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority...................... 7
C. Cost Estimate Prepared by the Congressional Budget
Office............................................. 8
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE......11
A. Committee Oversight Findings and Recommendations.... 11
B. Statement of General Performance Goals and
Objectives......................................... 11
C. Information Relating to Unfunded Mandates........... 11
D. Applicability of House Rule XXI 5(b)................ 11
E. Tax Complexity Analysis............................. 11
F. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits............................ 12
G. Duplication of Federal Programs..................... 12
H. Disclosure of Directed Rule Makings................. 12
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED...........12
VII. DISSENTING VIEWS................................................21
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Tribal Employment and Jobs Protection
Act''.
SEC. 2. EXCEPTION TO EMPLOYER HEALTH INSURANCE MANDATE FOR INDIAN
TRIBAL GOVERNMENTS AND TRIBALLY OWNED BUSINESSES.
(a) In General.--Section 4980H(c)(2) of the Internal Revenue Code of
1986 is amended by adding at the end the following new subparagraph:
``(G) Exception for indian tribal governments and
tribally owned businesses.--
``(i) In general.--The term `applicable large
employer' shall not include any tribal
employer.
``(ii) Tribal employer.--For purposes of this
subparagraph, the term `tribal employer'
means--
``(I) any Indian tribal government
(as defined in section 7701(a)(40)) or
subdivision thereof, or any agency or
instrumentality of either,
``(II) any tribal organization (as
defined in section 4(l) of the Indian
Self-Determination and Education
Assistance Act (25 U.S.C. 450b(l))),
``(III) any corporation if more than
50 percent (determined by vote and
value) of the outstanding stock of such
corporation is owned, directly or
indirectly, by any entity described in
subclause (I) or (II), and
``(IV) any partnership if more than
50 percent of the value of the capital
and profits interests are owned,
directly or indirectly, by any entity
described in subclause (I) or (II).''.
(b) Effective Date.--The amendment made by this section shall apply
to months beginning after December 31, 2015.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The bill, H.R. 3080, as reported by the Committee on Ways
and Means, provides an exception to the employer health
insurance mandate for Indian tribal governments and tribally
owned businesses.
B. Background and Need for Legislation
The President's health care law, the Affordable Care Act
(ACA), imposes a new requirement on employers that employ more
than fifty full-time equivalent workers (FTEs) to offer health
coverage to their workers or pay one of two penalties beginning
in 2014. Full-time workers for the purposes of this employer
mandate are defined as those who work at least 30 hours per
week.
H.R. 3080 exempts tribal organizations, governments, and
majority-owned tribal corporations and partnerships from
Obamacare's employer mandate. Historically, Indian Health
Services provides health services to individuals, and as such,
tribal members are exempted from the ACA's individual mandate.
However, this exemption did not extend to tribes who act as
employers. It is inconsistent to omit individuals from the
individual mandate because they are covered by IHS, while at
the same time requiring employers, employing the same
individuals, to participate in the employer mandate or pay a
penalty. Further, it is the position of the Committee that all
large businesses--including those that are tribally-owned--
should have relief from the employer mandate. The current law
requirement could be financially devastating to certain,
tribally-owned large employers and only increase the
unemployment rate for these tribes. For these reasons,
tribally-owned businesses should be exempted from the employer
mandate.
C. Legislative History
Background
H.R. 3080 was introduced on July 15, 2015, and was referred
to the Committee on Ways and Means.
Committee action
The Committee on Ways and Means marked up H.R. 3080, the
Tribal Employment and Jobs Protection Act, on June 15, 2016,
and ordered the bill, as amended, favorably reported (with
quorum being present).
Committee hearings
The policy issues surrounding employer mandate and their
impact on access to health care have been discussed at four
Ways and Means hearings during the 114th Congress:
Subcommittee on Health Hearing on The
Individual and Employer Mandates in the President's
Healthcare Law (April 14, 2015);
Full Committee Hearing on the Tax Treatment
of Health Care (April 14, 2016);
Subcommittee on Tax Policy Member Day
Hearing on Tax Legislation (May 12, 2016);
Subcommittee on Health Member Day Hearing on
Tax-Related Proposals to Improve Health Care (May 17,
2016).
II. EXPLANATION OF THE BILL
A. Exception to Employer Health Insurance Mandate for Indian Tribal
Governments and Tribally Owned Businesses (sec. 2 of the bill and sec.
4980H of the Code)
PRESENT LAW
Employer shared responsibility for health coverage
In general
Under the Patient Protection and Affordable Care Act
(``PPACA''),\1\ as amended by the Health Care and Education
Reconciliation Act of 2010\2\ (referred to collectively as the
``Affordable Care Act'' or ``ACA''), an applicable large
employer may be subject to a tax, called an ``assessable
payment,'' for a month if one or more of its full-time
employees is certified to the employer as receiving for the
month a premium assistance credit for health insurance
purchased on an American Health Benefit Exchange or reduced
cost-sharing for the employee's share of expenses covered by
such health insurance.\3\ As discussed below, whether an
applicable large employer owes an assessable payment and the
amount of any assessable payment depend on whether the employer
offers its full-time employees and their dependents the
opportunity to enroll in minimum essential coverage under a
group health plan sponsored by the employer and, if it does,
whether the coverage offered is affordable and provides minimum
value.\4\
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\1\Pub. L. No. 111-148.
\2\Pub. L. No. 111-152.
\3\Sec. 4980H. This is sometimes referred to as the employer shared
responsibility requirement or employer mandate. An applicable large
employer is also subject to annual reporting requirements under section
6056. Premium assistance credits for health insurance purchased on an
American Health Benefit Exchange are provided under section 36B.
Reduced cost-sharing for an individual's share of expenses covered by
such health insurance is provided under section 1402 of PPACA.
\4\Under the ACA, these rules are effective for months beginning
after December 31, 2013. However, in Notice 2013-45, 2013-31 I.R.B.
116, Part III, Q&A-2, the Internal Revenue Service (``IRS'') announced
that no assessable payments will be assessed for 2014. In addition, in
2014, the IRS announced that no assessable payments for 2015 will apply
to applicable large employers that have fewer than 100 full-time
employees and full-time equivalent employees and meet certain other
requirements. Section XV.D.6 of the preamble to the final regulations,
T.D. 9655, 79 Fed. Reg. 8544, 8574-8575, February 12, 2014.
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Definitions of full-time employee and applicable large
employer
For purposes of applying these rules, full-time employee
means, with respect to any month, an employee who is employed
on average at least 30 hours of service per week. Hours of
service are to be determined under regulations, rules, and
guidance prescribed by the Secretary of the Treasury
(``Secretary''), in consultation with the Secretary of Labor,
including rules for employees who are not compensated on an
hourly basis.
Applicable large employer generally means, with respect to
a calendar year, an employer who employed an average of at
least 50 full-time employees on business days during the
preceding calendar year.\5\ Solely for purposes of determining
whether an employer is an applicable large employer (that is,
whether the employer has at least 50 full-time employees),
besides the number of full-time employees, the employer must
include the number of its full-time equivalent employees for a
month, determined by dividing the aggregate number of hours of
service for that month (up to a maximum of 120 for any
employee) of employees who are not full-time employees for the
month by 120. In addition, in determining whether an employer
is an applicable large employer, members of the same controlled
group, group under common control, and affiliated service group
are treated as a single employer.\6\
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\5\Additional rules apply, for example, in the case of an employer
that was not in existence for the entire preceding calendar year.
\6\The rules for determining controlled group, group under common
control, and affiliated service group under section 414(b), (c), (m)
and (o) apply for this purpose. If the group is an applicable large
employer under this test, each member of the group is an applicable
large employer and subject to the employer shared responsibility
requirement even if the member by itself would not be an applicable
large employer. In addition, in determining assessable payments (as
discussed herein), only one 30-employee reduction in full-time
employees applies to the group and is allocated among the members
ratably based on the number of full-time employees employed by each
member.
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Assessable payments
If an applicable large employer does not offer its full-
time employees and their dependents minimum essential coverage
under an employer-sponsored plan and at least one full-time
employee is so certified to the employer, the employer may be
subject to an assessable payment of $2,160 (for 2016)\7\
(divided by 12 and applied on a monthly basis) multiplied by
the number of its full-time employees in excess of 30,
regardless of the number of full-time employees so certified.
For example, in 2016, Employer A fails to offer minimum
essential coverage and has 100 full-time employees, 10 of whom
receive premium assistance credits for the entire year. The
employer's assessable payment is $2,160 for each employee over
the 30-employee threshold, for a total of $151,200 ($2,160
multiplied by 70, that is, 100 minus 30).
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\7\For calendar years after 2014, the dollar amounts (which were
initially $2,000 and $3,000) are increased by the percentage (if any)
by which the average per capita premium for health insurance coverage
in the United States for the preceding calendar year (as estimated by
the Secretary of HHS no later than October 1 of the preceding calendar
year) exceeds the average per capita premium for 2013 (as determined by
the Secretary of HHS), rounded down to the next lowest multiple of $10.
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Generally an employee who is offered minimum essential
coverage under an employer-sponsored plan is not eligible for a
premium assistance credit or reduced cost-sharing unless the
coverage is unaffordable or fails to provide minimum value.\8\
However, if an employer offers its full-time employees and
their dependents minimum essential coverage under an employer-
sponsored plan and at least one full-time employee is certified
as receiving a premium assistance credit or reduced cost-
sharing (because the coverage is unaffordable or fails to
provide minimum value), the employer may be subject to an
assessable payment of $3,240 (for 2016) (divided by 12 and
applied on a monthly basis) multiplied by the number of such
full-time employees. However, the assessable payment in this
case is capped at the amount that would apply if the employer
failed to offer its full-time employees and their dependents
minimum essential coverage. For example, in 2016, Employer B
offers minimum essential coverage and has 100 full-time
employees, 20 of whom receive premium assistance credits for
the entire year. The employer's assessable payment before
consideration of the cap is $3,240 for each full-time employee
receiving a credit, for a total of $64,800. The cap on the
assessable payment is the amount that would have applied if the
employer failed to offer coverage, or $151,200 ($2,160
multiplied by 70, that is, 100 minus 30). In this example, the
cap therefore does not affect the amount of the assessable
payment, which remains at $64,800.
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\8\Under section 36B(c)(2)(C), coverage under an employer-sponsored
plan is unaffordable if the employee's share of the premium for self-
only coverage exceeds (for 2016) 9.66 percent of household income, and
the coverage fails to provide minimum value if the plan's share of
total allowed cost of provided benefits is less than 60 percent of such
costs. Treas. Reg. sec. 1.36B-2(c)(3)(vi) provides guidance on the
determination of whether coverage provides minimum value.
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Individual requirement to maintain minimum essential coverage
Under the ACA, individuals must be covered by a health plan
that provides at least minimum essential coverage or be subject
to a tax for failure to maintain the coverage (commonly
referred to as the ``individual mandate'').\9\ The tax is
imposed for any month that an individual does not have minimum
essential coverage unless the individual qualifies for an
exemption for the month as described below. Members of Indian
tribes are exempt from this requirement.\10\
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\9\Sec. 5000A. Treas. Reg. secs. 1.5000A-1 through 1.5000A-5
provide guidance on this provision.
\10\For this purpose, the definition of Indian tribe in section
45A(c)(6) applies.
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REASONS FOR CHANGE
The Committee believes that the employer shared
responsibility requirement imposes an undue and unnecessary
burden on tribal employers by requiring them to offer minimum
essential coverage to their full-time employees, many of whom
are tribal members. Tribal members are entitled to health care
through the Indian Health Service and are exempt from the
individual shared responsibility requirement, and thus do not
need to be provided minimum essential coverage by a tribal
employer.
EXPLANATION OF PROVISION
Under the provision, for purposes of the employer shared
responsibility requirement, the definition of applicable large
employer does not include any tribal employer. For this
purpose, the
term tribal employer includes (1) any Indian tribal
government\11\ or subdivision thereof, or any agency or
instrumentality of either, or (2) any tribal organization.\12\
Tribal employer also includes any corporation if more than 50
percent (determined by vote and value) of the outstanding stock
of such corporation is owned (directly or indirectly), and any
partnership if more than 50 percent of the value of the capital
and profits interests are owned (directly or indirectly), by
any tribal entity described in (1) or (2) above.
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\11\Indian tribal government is defined in section 7701(a)(40).
\12\Tribal organization for this purpose is defined in section 4(l)
of the Indian Self-Determination and Education Assistance Act (25
U.S.C. 450b(l)).
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EFFECTIVE DATE
The provision applies to months beginning after December
31, 2015.
III. VOTES OF THE COMMITTEE
In compliance with the Rules of the House of
Representatives, the following statement is made concerning the
vote of the Committee on Ways and Means during the markup
consideration of H.R. 3080, the ``Tribal Employment and Jobs
Protection Act,'' on June 15, 2016.
The bill, H.R. 3080, was ordered favorably reported to the
House of Representatives as amended by a roll call vote of 24
yeas to 13 nays (with a quorum being present). The vote was as
follows:
----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Brady...................... X ........ ......... Mr. Levin........ ........ X .........
Mr. Johnson.................... X ........ ......... Mr. Rangel....... ........ X .........
Mr. Nunes...................... X ........ ......... Mr. McDermott.... ........ X .........
Mr. Tiberi..................... X ........ ......... Mr. Lewis........ ........ X .........
Mr. Reichert................... X ........ ......... Mr. Neal......... ........ X .........
Mr. Boustany................... X ........ ......... Mr. Becerra...... ........ X .........
Mr. Roskam..................... X ........ ......... Mr. Doggett...... ........ X .........
Mr. Price...................... X ........ ......... Mr. Thompson..... ........ X .........
Mr. Buchanan................... X ........ ......... Mr. Larson....... ........ X .........
Mr. Smith (NE)................. X ........ ......... Mr. Blumenauer... ........ X .........
Ms. Jenkins.................... X ........ ......... Mr. Kind......... ........ ........ .........
Mr. Paulsen.................... X ........ ......... Mr. Pascrell..... ........ X .........
Mr. Marchant................... X ........ ......... Mr. Crowley...... ........ ........ .........
Ms. Black...................... X ........ ......... Mr. Davis........ ........ X .........
Mr. Reed....................... X ........ ......... Ms. Sanchez...... ........ X .........
Mr. Young...................... X
Mr. Kelly...................... X
Mr. Renacci.................... X
Mr. Meehan..................... X
Ms. Noem....................... X
Mr. Holding.................... X
Mr. Smith (MO)................. X
Mr. Dold....................... X
Mr. Rice....................... X
----------------------------------------------------------------------------------------------------------------
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 3080, as
reported.
The bill, as reported, is estimated to have the following
effect on Federal budget receipts for fiscal years 2017-2026:
Fiscal Years
[Millions of dollars]
----------------------------------------------------------------------------------------------------------------
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2017-21 2017-26
----------------------------------------------------------------------------------------------------------------
-3 -13 -15 -11 -11 -12 -12 -13 -14 -15 -53 -119
----------------------------------------------------------------------------------------------------------------
[1] Estimate includes the outlay effects:
----------------------------------------------------------------------------------------------------------------
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2017-21 2017-26
----------------------------------------------------------------------------------------------------------------
3 6 9 12 12 12 13 14 14 15 41 110
----------------------------------------------------------------------------------------------------------------
[2] Estimate includes the following off-budget effects:
----------------------------------------------------------------------------------------------------------------
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2017-21 2017-26
----------------------------------------------------------------------------------------------------------------
1 3 4 4 5 5 5 5 6 6 17 44
----------------------------------------------------------------------------------------------------------------
Pursuant to clause 8 of rule XIII of the Rules of the House
of Representatives, the following statement is made by the
Joint Committee on Taxation with respect to the provisions of
the bill amending the Internal Revenue Code of 1986: The gross
budgetary effect (before incorporating macroeconomic effects)
in any fiscal year is less than 0.25 percent of the current
projected gross domestic product of the United States for that
fiscal year; therefore, the bill is not ``major legislation''
for purposes of requiring that the estimate include the
budgetary effects of changes in economic output, employment,
capital stock and other macroeconomic variables.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves increased budget authority. The Committee further
states that the revenue-reducing tax provisions involve
increased tax expenditures. (See amounts in table in Part IV.A.
above.)
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following statement by CBO is
provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 30, 2016.
Hon. Kevin Brady,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3080, the Tribal
Employment and Jobs Protection Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Peter
Huether.
Sincerely,
Keith Hall.
Enclosure.
H.R. 3080--Tribal Employment and Jobs Protection Act
H.R. 3080 would amend the Internal Revenue Code to exclude
tribal employers from the requirements under current law that
some large employers who do not offer health insurance coverage
that meets certain standards must pay a penalty if they have
any full-time employees who receive a subsidy through a health
insurance marketplace. Tribal employers include Indian tribal
governments and certain other tribal organizations, or certain
corporations largely owned by such tribal entities.
The staff of the Joint Committee on Taxation (JCT)
estimates that enacting H.R. 3080 would reduce revenues by $9
million over the 2016-2026 period and increase outlays by $110
million over the same period. As a result, H.R. 3080 would
increase federal deficits by $119 million over the 2016-2026
period, JCT estimates. The change in revenues includes an
increase of $44 million in off-budget revenues (from Social
Security payroll taxes). As a result, on-budget deficits are
expected to increase by $163 million over the 2016-2026 period.
JCT also estimates that the bill would have a small effect on
health insurance coverage, slightly lowering the number of
individuals with employment-based coverage and increasing the
number of uninsured individuals.
The Statutory Pay-As-You-Go Act of 2010 establishes budget-
reporting and enforcement procedures for legislation affecting
revenues or direct spending. The net changes in revenues and
direct spending that are subject to those pay-as-you-go
procedures are shown in the following table. Only on-budget
changes to revenues and direct spending are subject to pay-as-
you-go procedures.
CBO and JCT estimate that enacting the bill would not
increase net direct spending or on-budget deficits by more than
$5 billion in any of the four 10-year periods beginning in
2027.
JCT has determined that the bill contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Peter Huether.
The estimate was approved by Mark Booth, Unit Chief, Revenue
Estimating.
CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 3080, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON WAYS AND MEANS ON JUNE 15, 2016
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-------------------------------------------------------------------------------------------------------------
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2016-2021 2016-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN THE ON-BUDGET DEFICIT
Statutory Pay-As-You-Go Effects........... 0 4 16 19 15 16 17 17 18 20 21 70 163
Memorandum:a
Change in Outlays..................... 0 3 6 9 12 12 12 13 14 14 15 41 110
Change in On-Budget Revenues.......... 0 -1 -10 -10 -3 -4 -5 -4 -4 -6 -6 -29 -53
Change in Off-Budget Revenues......... 0 1 3 4 4 5 5 5 5 6 6 17 44
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Staff of the Joint Committee on Taxation.
aA positive sign for outlays indicates an increase in outlays. A positive sign for revenues indicates an increase in revenues.
Note: Components may not sum to total because of rounding.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives (relating to oversight findings),
the Committee advises that it was as a result of the Committees
review of the provisions of H.R. 3080 that the Committee
concluded that it is appropriate to report the bill, as
amended, favorably to the House of Representatives with the
recommendation that the bill do pass.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill contains no measure that authorizes funding, so no
statement of general performance goals and objectives for which
any measure authorizes funding is required.
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
D. Applicability of House Rule XXI 5(b)
Rule XXI 5(b) of the Rules of the House of Representatives
provides, in part, that ``A bill or joint resolution,
amendment, or conference report carrying a Federal income tax
rate increase may not be considered as passed or agreed to
unless so determined by a vote of not less than three-fifths of
the Members voting, a quorum being present.'' The Committee has
carefully reviewed the bill, and states that the bill does not
involve any Federal income tax rate increases within the
meaning of the rule.
E. Tax Complexity Analysis
The following statement is made pursuant to clause 3(h)(1)
of rule XIII of the Rules of the House of Representatives.
Section 4022(b) of the Internal Revenue Service Restructuring
and Reform Act of 1998 (``IRS Reform Act'') requires the staff
of the Joint Committee on Taxation (in consultation with the
Internal Revenue Service and the Treasury Department) to
provide a tax complexity analysis. The complexity analysis is
required for all legislation reported by the Senate Committee
on Finance, the House Committee on Ways and Means, or any
committee of conference if the legislation includes a provision
that directly or indirectly amends the Internal Revenue Code of
1986 and has widespread applicability to individuals or small
businesses.
Pursuant to clause 3(h)(1) of rule XIII of the Rules of the
House of Representatives, the staff of the Joint Committee on
Taxation has determined that a complexity analysis is not
required under section 4022(b) of the IRS Reform Act because
the bill contains no provisions that amend the Internal Revenue
Code of 1986 and that have ``widespread applicability'' to
individuals or small businesses, within the meaning of the
rule.
F. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
G. Duplication of Federal Programs
In compliance with Sec. 3(g)(2) of H. Res. 5 (114th
Congress), the Committee states that no provision of the bill
establishes or reauthorizes: (1) a program of the Federal
Government known to be duplicative of another Federal program,
(2) a program included in any report from the Government
Accountability Office to Congress pursuant to section 21 of
Public Law 111-139, or (3) a program related to a program
identified in the most recent Catalog of Federal Domestic
Assistance, published pursuant to the Federal Program
Information Act (Public Law 95-220, as amended by Public Law
98-169).
H. Disclosure of Directed Rule Makings
In compliance with Sec. 3(i) of H. Res. 5 (114th Congress),
the following statement is made concerning directed rule
makings: The Committee estimates that the bill requires no
directed rule makings within the meaning of such section.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL,
AS REPORTED
A. Text of Existing Law Amended or Repealed by the Bill, as Reported
In compliance with clause 3(e)(1)(A) of rule XIII of the
Rules of the House of Representatives, the text of each section
proposed to be amended or repealed by the bill, as reported, is
shown below:
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e)(1)(A) of rule XIII of the
Rules of the House of Representatives, the text of each section
proposed to be amended or repealed by the bill, as reported, is
shown below:
INTERNAL REVENUE CODE OF 1986
* * * * * * *
Subtitle D--Miscellaneous Excise Taxes
* * * * * * *
CHAPTER 43--QUALIFIED PENSION, ETC., PLANS
* * * * * * *
SEC. 4980H. SHARED RESPONSIBILITY FOR EMPLOYERS REGARDING HEALTH
COVERAGE.
(a) Large Employers Not Offering Health Coverage.--If--
(1) any applicable large employer fails to offer to
its full-time employees (and their dependents) the
opportunity to enroll in minimum essential coverage
under an eligible employer-sponsored plan (as defined
in section 5000A(f)(2)) for any month, and
(2) at least one full-time employee of the applicable
large employer has been certified to the employer under
section 1411 of the Patient Protection and Affordable
Care Act as having enrolled for such month in a
qualified health plan with respect to which an
applicable premium tax credit or cost-sharing reduction
is allowed or paid with respect to the employee,
then there is hereby imposed on the employer an assessable
payment equal to the product of the applicable payment amount
and the number of individuals employed by the employer as full-
time employees during such month.
(b) Large Employers Offering Coverage With Employees Who
Qualify for Premium Tax Credits or Cost-Sharing Reductions.--
(1) In general.--If--
(A) an applicable large employer offers to
its full-time employees (and their dependents)
the opportunity to enroll in minimum essential
coverage under an eligible employer-sponsored
plan (as defined in section 5000A(f)(2)) for
any month, and
(B) 1 or more full-time employees of the
applicable large employer has been certified to
the employer under section 1411 of the Patient
Protection and Affordable Care Act as having
enrolled for such month in a qualified health
plan with respect to which an applicable
premium tax credit or cost-sharing reduction is
allowed or paid with respect to the employee,
then there is hereby imposed on the employer an
assessable payment equal to the product of the number
of full-time employees of the applicable large employer
described in subparagraph (B) for such month and an
amount equal to \1/12\ of $3,000.
(2) Overall limitation.--The aggregate amount of tax
determined under paragraph (1) with respect to all
employees of an applicable large employer for any month
shall not exceed the product of the applicable payment
amount and the number of individuals employed by the
employer as full-time employees during such month.
(c) Definitions and Special Rules.--For purposes of this
section--
(1) Applicable payment amount.--The term ``applicable
payment amount'' means, with respect to any month, \1/
12\ of $2,000.
(2) Applicable large employer.--
(A) In general.--The term ``applicable large
employer'' means, with respect to a calendar
year, an employer who employed an average of at
least 50 full-time employees on business days
during the preceding calendar year.
(B) Exemption for certain employers.--
(i) In general.--An employer shall
not be considered to employ more than
50 full-time employees if--
(I) the employer's workforce
exceeds 50 full-time employees
for 120 days or fewer during
the calendar year, and
(II) the employees in excess
of 50 employed during such 120-
day period were seasonal
workers.
(ii) Definition of seasonal
workers.--The term ``seasonal worker''
means a worker who performs labor or
services on a seasonal basis as defined
by the Secretary of Labor, including
workers covered by section 500.20(s)(1)
of title 29, Code of Federal
Regulations and retail workers employed
exclusively during holiday seasons.
(C) Rules for determining employer size.--For
purposes of this paragraph--
(i) Application of aggregation rule
for employers.--All persons treated as
a single employer under subsection (b),
(c), (m), or (o) of section 414 of the
Internal Revenue Code of 1986 shall be
treated as 1 employer.
(ii) Employers not in existence in
preceding year.--In the case of an
employer which was not in existence
throughout the preceding calendar year,
the determination of whether such
employer is an applicable large
employer shall be based on the average
number of employees that it is
reasonably expected such employer will
employ on business days in the current
calendar year.
(iii) Predecessors.--Any reference in
this subsection to an employer shall
include a reference to any predecessor
of such employer.
(D) Application of employer size to
assessable penalties.--
(i) In general.--The number of
individuals employed by an applicable
large employer as full-time employees
during any month shall be reduced by 30
solely for purposes of calculating--
(I) the assessable payment
under subsection (a), or
(II) the overall limitation
under subsection (b)(2).
(ii) Aggregation.--In the case of
persons treated as 1 employer under
subparagraph (C)(i), only 1 reduction
under subclause (I) or (II) shall be
allowed with respect to such persons
and such reduction shall be allocated
among such persons ratably on the basis
of the number of full-time employees
employed by each such person.
(E) Full-time equivalents treated as full-
time employees.--Solely for purposes of
determining whether an employer is an
applicable large employer under this paragraph,
an employer shall, in addition to the number of
full-time employees for any month otherwise
determined, include for such month a number of
full-time employees determined by dividing the
aggregate number of hours of service of
employees who are not full-time employees for
the month by 120.
(F) Exemption for health coverage under
TRICARE or the Veterans Administration.--Solely
for purposes of determining whether an employer
is an applicable large employer under this
paragraph for any month, an individual shall
not be taken into account as an employee for
such month if such individual has medical
coverage for such month under--
(i) chapter 55 of title 10, United
States Code, including coverage under
the TRICARE program, or
(ii) under a health care program
under chapter 17 or 18 of title 38,
United States Code, as determined by
the Secretary of Veterans Affairs, in
coordination with the Secretary of
Health and Human Services and the
Secretary.
(3) Applicable premium tax credit and cost-sharing
reduction.--The term ``applicable premium tax credit
and cost-sharing reduction'' means--
(A) any premium tax credit allowed under
section 36B,
(B) any cost-sharing reduction under section
1402 of the Patient Protection and Affordable
Care Act, and
(C) any advance payment of such credit or
reduction under section 1412 of such Act.
(4) Full-time employee.--
(A) In general.--The term ``full-time
employee'' means, with respect to any month, an
employee who is employed on average at least 30
hours of service per week.
(B) Hours of service.--The Secretary, in
consultation with the Secretary of Labor, shall
prescribe such regulations, rules, and guidance
as may be necessary to determine the hours of
service of an employee, including rules for the
application of this paragraph to employees who
are not compensated on an hourly basis.
(5) Inflation adjustment.--
(A) In general.--In the case of any calendar
year after 2014, each of the dollar amounts in
subsection (b) and paragraph (1) shall be
increased by an amount equal to the product
of--
(i) such dollar amount, and
(ii) the premium adjustment
percentage (as defined in section
1302(c)(4) of the Patient Protection
and Affordable Care Act) for the
calendar year.
(B) Rounding.--If the amount of any increase
under subparagraph (A) is not a multiple of
$10, such increase shall be rounded to the next
lowest multiple of $10.
(6) Other definitions.--Any term used in this section
which is also used in the Patient Protection and
Affordable Care Act shall have the same meaning as when
used in such Act.
(7) Tax nondeductible.--For denial of deduction for
the tax imposed by this section, see section 275(a)(6).
(d) Administration and Procedure.--
(1) In general.--Any assessable payment provided by
this section shall be paid upon notice and demand by
the Secretary, and shall be assessed and collected in
the same manner as an assessable penalty under
subchapter B of chapter 68.
(2) Time for payment.--The Secretary may provide for
the payment of any assessable payment provided by this
section on an annual, monthly, or other periodic basis
as the Secretary may prescribe.
(3) Coordination with credits, etc..--The Secretary
shall prescribe rules, regulations, or guidance for the
repayment of any assessable payment (including
interest) if such payment is based on the allowance or
payment of an applicable premium tax credit or cost-
sharing reduction with respect to an employee, such
allowance or payment is subsequently disallowed, and
the assessable payment would not have been required to
be made but for such allowance or payment.
* * * * * * *
B. Changes in Existing Law Proposed by the Bill, as Reported
In compliance with clause 3(e)(1)(B) of rule XIII of the
Rules of the House of Representatives, changes in existing law
proposed by the bill, as reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italics, existing law in
which no change is proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e)(1)(B) of rule XIII of the
Rules of the House of Representatives, changes in existing law
proposed by the bill, as reported, are shown as follows (new
matter is printed in italics and existing law in which no
change is proposed is shown in roman):
INTERNAL REVENUE CODE OF 1986
* * * * * * *
Subtitle D--Miscellaneous Excise Taxes
* * * * * * *
CHAPTER 43--QUALIFIED PENSION, ETC., PLANS
* * * * * * *
SEC. 4980H. SHARED RESPONSIBILITY FOR EMPLOYERS REGARDING HEALTH
COVERAGE.
(a) Large Employers Not Offering Health Coverage.--If--
(1) any applicable large employer fails to offer to
its full-time employees (and their dependents) the
opportunity to enroll in minimum essential coverage
under an eligible employer-sponsored plan (as defined
in section 5000A(f)(2)) for any month, and
(2) at least one full-time employee of the applicable
large employer has been certified to the employer under
section 1411 of the Patient Protection and Affordable
Care Act as having enrolled for such month in a
qualified health plan with respect to which an
applicable premium tax credit or cost-sharing reduction
is allowed or paid with respect to the employee,
then there is hereby imposed on the employer an assessable
payment equal to the product of the applicable payment amount
and the number of individuals employed by the employer as full-
time employees during such month.
(b) Large Employers Offering Coverage With Employees Who
Qualify for Premium Tax Credits or Cost-Sharing Reductions.--
(1) In general.--If--
(A) an applicable large employer offers to
its full-time employees (and their dependents)
the opportunity to enroll in minimum essential
coverage under an eligible employer-sponsored
plan (as defined in section 5000A(f)(2)) for
any month, and
(B) 1 or more full-time employees of the
applicable large employer has been certified to
the employer under section 1411 of the Patient
Protection and Affordable Care Act as having
enrolled for such month in a qualified health
plan with respect to which an applicable
premium tax credit or cost-sharing reduction is
allowed or paid with respect to the employee,
then there is hereby imposed on the employer an
assessable payment equal to the product of the number
of full-time employees of the applicable large employer
described in subparagraph (B) for such month and an
amount equal to \1/12\ of $3,000.
(2) Overall limitation.--The aggregate amount of tax
determined under paragraph (1) with respect to all
employees of an applicable large employer for any month
shall not exceed the product of the applicable payment
amount and the number of individuals employed by the
employer as full-time employees during such month.
(c) Definitions and Special Rules.--For purposes of this
section--
(1) Applicable payment amount.--The term ``applicable
payment amount'' means, with respect to any month, \1/
12\ of $2,000.
(2) Applicable large employer.--
(A) In general.--The term ``applicable large
employer'' means, with respect to a calendar
year, an employer who employed an average of at
least 50 full-time employees on business days
during the preceding calendar year.
(B) Exemption for certain employers.--
(i) In general.--An employer shall
not be considered to employ more than
50 full-time employees if--
(I) the employer's workforce
exceeds 50 full-time employees
for 120 days or fewer during
the calendar year, and
(II) the employees in excess
of 50 employed during such 120-
day period were seasonal
workers.
(ii) Definition of seasonal
workers.--The term ``seasonal worker''
means a worker who performs labor or
services on a seasonal basis as defined
by the Secretary of Labor, including
workers covered by section 500.20(s)(1)
of title 29, Code of Federal
Regulations and retail workers employed
exclusively during holiday seasons.
(C) Rules for determining employer size.--For
purposes of this paragraph--
(i) Application of aggregation rule
for employers.--All persons treated as
a single employer under subsection (b),
(c), (m), or (o) of section 414 of the
Internal Revenue Code of 1986 shall be
treated as 1 employer.
(ii) Employers not in existence in
preceding year.--In the case of an
employer which was not in existence
throughout the preceding calendar year,
the determination of whether such
employer is an applicable large
employer shall be based on the average
number of employees that it is
reasonably expected such employer will
employ on business days in the current
calendar year.
(iii) Predecessors.--Any reference in
this subsection to an employer shall
include a reference to any predecessor
of such employer.
(D) Application of employer size to
assessable penalties.--
(i) In general.--The number of
individuals employed by an applicable
large employer as full-time employees
during any month shall be reduced by 30
solely for purposes of calculating--
(I) the assessable payment
under subsection (a), or
(II) the overall limitation
under subsection (b)(2).
(ii) Aggregation.--In the case of
persons treated as 1 employer under
subparagraph (C)(i), only 1 reduction
under subclause (I) or (II) shall be
allowed with respect to such persons
and such reduction shall be allocated
among such persons ratably on the basis
of the number of full-time employees
employed by each such person.
(E) Full-time equivalents treated as full-
time employees.--Solely for purposes of
determining whether an employer is an
applicable large employer under this paragraph,
an employer shall, in addition to the number of
full-time employees for any month otherwise
determined, include for such month a number of
full-time employees determined by dividing the
aggregate number of hours of service of
employees who are not full-time employees for
the month by 120.
(F) Exemption for health coverage under
TRICARE or the Veterans Administration.--Solely
for purposes of determining whether an employer
is an applicable large employer under this
paragraph for any month, an individual shall
not be taken into account as an employee for
such month if such individual has medical
coverage for such month under--
(i) chapter 55 of title 10, United
States Code, including coverage under
the TRICARE program, or
(ii) under a health care program
under chapter 17 or 18 of title 38,
United States Code, as determined by
the Secretary of Veterans Affairs, in
coordination with the Secretary of
Health and Human Services and the
Secretary.
(G) Exception for Indian tribal governments
and tribally owned businesses.--
(i) In general.--The term
``applicable large employer'' shall not
include any tribal employer.
(ii) Tribal employer.--For purposes
of this subparagraph, the term ``tribal
employer'' means--
(I) any Indian tribal
government (as defined in
section 7701(a)(40)) or
subdivision thereof, or any
agency or instrumentality of
either,
(II) any tribal organization
(as defined in section 4(l) of
the Indian Self-Determination
and Education Assistance Act
(25 U.S.C. 450b(l))),
(III) any corporation if more
than 50 percent (determined by
vote and value) of the
outstanding stock of such
corporation is owned, directly
or indirectly, by any entity
described in subclause (I) or
(II), and
(IV) any partnership if more
than 50 percent of the value of
the capital and profits
interests are owned, directly
or indirectly, by any entity
described in subclause (I) or
(II).
(3) Applicable premium tax credit and cost-sharing
reduction.--The term ``applicable premium tax credit
and cost-sharing reduction'' means--
(A) any premium tax credit allowed under
section 36B,
(B) any cost-sharing reduction under section
1402 of the Patient Protection and Affordable
Care Act, and
(C) any advance payment of such credit or
reduction under section 1412 of such Act.
(4) Full-time employee.--
(A) In general.--The term ``full-time
employee'' means, with respect to any month, an
employee who is employed on average at least 30
hours of service per week.
(B) Hours of service.--The Secretary, in
consultation with the Secretary of Labor, shall
prescribe such regulations, rules, and guidance
as may be necessary to determine the hours of
service of an employee, including rules for the
application of this paragraph to employees who
are not compensated on an hourly basis.
(5) Inflation adjustment.--
(A) In general.--In the case of any calendar
year after 2014, each of the dollar amounts in
subsection (b) and paragraph (1) shall be
increased by an amount equal to the product
of--
(i) such dollar amount, and
(ii) the premium adjustment
percentage (as defined in section
1302(c)(4) of the Patient Protection
and Affordable Care Act) for the
calendar year.
(B) Rounding.--If the amount of any increase
under subparagraph (A) is not a multiple of
$10, such increase shall be rounded to the next
lowest multiple of $10.
(6) Other definitions.--Any term used in this section
which is also used in the Patient Protection and
Affordable Care Act shall have the same meaning as when
used in such Act.
(7) Tax nondeductible.--For denial of deduction for
the tax imposed by this section, see section 275(a)(6).
(d) Administration and Procedure.--
(1) In general.--Any assessable payment provided by
this section shall be paid upon notice and demand by
the Secretary, and shall be assessed and collected in
the same manner as an assessable penalty under
subchapter B of chapter 68.
(2) Time for payment.--The Secretary may provide for
the payment of any assessable payment provided by this
section on an annual, monthly, or other periodic basis
as the Secretary may prescribe.
(3) Coordination with credits, etc..--The Secretary
shall prescribe rules, regulations, or guidance for the
repayment of any assessable payment (including
interest) if such payment is based on the allowance or
payment of an applicable premium tax credit or cost-
sharing reduction with respect to an employee, such
allowance or payment is subsequently disallowed, and
the assessable payment would not have been required to
be made but for such allowance or payment.
* * * * * * *
VII. DISSENTING VIEWS
We object to H.R. 3080 because it increases the deficit and
undermines the employer shared responsibility provisions of the
Affordable Care Act (ACA). With this legislation, the Majority
furthers their fiscal irresponsibility and misguided
priorities.
The bill is the latest in a continued series of attacks by
the Majority on the ACA. Under section 4980H of the Internal
Revenue Code, the employer shared responsibility provision
requires an employer with 50 or more full-time equivalents
(FTEs) to offer affordable coverage of minimum value to full-
time workers or pay a penalty. H.R. 3080 would amend the
Internal Revenue Code to exempt tribal governments, tribally-
owned businesses, and tribal organizations from the employer
shared responsibility provisions of the ACA (often called the
employer mandate). That means that even lucrative, for-profit
entities will not be required to provide health care to their
full-time workforce under this bill. This is a troubling
proposal that actively undermines access to health coverage for
middle class Americans.
The ACA exempts members of tribes--who are generally
eligible for coverage through the Indian Health Service--from
the individual mandate, and some suggest that this exemption
should also apply to the employer mandate. However, this
ignores the fact that many of the individuals employed by
tribal entities are not actually members of a tribe. Because of
this, they are not eligible for benefits through the Indian
Health Service in the event that their employer doesn't cover
them. During the mark-up, we asked JCT to provide an estimate
of the number of workers employed by tribal governments,
tribally-owned enterprises and tribal organizations. They have
not yet provided this information; however, recent data suggest
that about three-fourths of employees at tribally-owned casinos
are not covered by IHS. Without the coverage provided through
their employer, these individuals will be on their own to
purchase insurance through the individual market.
We recognize that there is a balance that we need to
strike. Tribal sovereignty is extremely important and we all
respect the right of tribes to engage in self-government. But
self-government isn't the issue here. By extending the scope of
this exemption beyond tribes and tribal organizations, this
bill creates an inappropriate carve-out for large, for-profit
businesses. This reaches far beyond self-governance and into
purely commercial activity.
About 5,600 employees would lose employer coverage as a
result of this bill, and 2,000 of these individuals would
ultimately become uninsured. This sets us on a slippery slope
that will lead to more and more carve outs from the
requirements of the law.
For these reasons we strongly object to H.R. 3080.
Sander M. Levin,
Ranking Member.
[all]