The National Association of Mutual Insurance Companies (NAMIC) yesterday called on lawmakers to make repealing the 1099 requirement in the healthcare reform law enacted earlier this year a top priority.
“Unless Congress acts, this misguided provision will impose a huge burden on businesses across America and will only stall any economic recovery,” said Jimi Grande, senior vice president of federal and political affairs for NAMIC. “Given the fragile state of the economy, the last thing American small businesses--in the insurance industry or elsewhere--need is more red tape from Washington.”
Under the provision, section 9006 of the healthcare law, any business expense to a single vendor totaling more than $600 for the year will require the filing of a 1099 form with the Internal Revenue Service starting in 2012. Currently, businesses are required to file only for expenses paid to unincorporated entities, but the new law would apply to everyday business expenditures like phones, internet providers and office supplies. The requirement would also apply to non-profit entities.
“As Congress reconvenes this week, they have a perfect opportunity to fix this egregious mistake,” Grande said. “In the rush to enact healthcare reform, this provision was slipped into the bill without any review or questioning. It exists solely to take money away from small businesses and hand it over to the federal government. When an onerous provision such as this can be passed without any notice or debate, it’s no wonder that polls show many Americans are frustrated with Washington.”
Legislation to repeal the requirement was rejected in the Senate earlier this year, but in recent days several congressional leaders have voiced support for repealing or revisiting the 1099 requirement.
“Members of Congress now acknowledge this provision as a mistake, but where were they when it was being rushed through the legislative process?” Grande asked. “We look forward to working with members of the House, Senate and the Administration to repeal this onerous requirement.”
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