‘Onerous’ 1099 healthcare provision: Going, going, gone!
Almost, but Obama expected to sign repeal in coming days
published 04/07/2011

The association community is waiting with much anticipation for President Obama to sign into law the repeal of a provision that would have created a filing nightmare for nonprofits and small businesses.
This week, the US Senate passed 87-12 what has become known as the "1099 repeal" of the healthcare law. The provision would have forced associations and companies to file an IRS 1099 form for each instance of business conducted over $600 starting in 2012. For associations, especially small organizations, this would have created a laborious amount of paperwork, repeal supporters argued. And, associations would have had to create a system to administer and track the 1099s, as well.
"We just didn't see any need for that, and obviously Congress agreed," said ASAE public policy sr. VP Jim Clarke, CAE, who was surprised by the wide margin of the Senate vote.
"Clearly this shows that [the provision] was something that shouldn't have been included in the healthcare law," he said. Clarke thanked ASAE’s supporters for their grassroots efforts.
Repeal did not happen overnight. The provision was designed as a revenue raiser for new healthcare benefits. Despite many sympathizers in Congress, efforts to repeal it last year were stymied largely because both houses could not agree on an alternative fundraising mechanism.
After Democrats suffered a brutal defeat in the midterm elections, which many attributed in part to the unpopularity of the healthcare law, President Obama used the repeal of the 1099 provision as an olive branch to the new, Republican-controlled House (see "Obama calls to fix 'flawed' 1099 provision in State of the Union address," 1/27).Obama repeated the notion when he later addressed the US Chamber, which often is at odds with the President, including over healthcare (see "In Chamber address, Obama again calls for repeal of 1099 provision," 2/10).
To make up for the money lost in repeal, House Republicans rewrote the way the government would pay for subsidies under the new health exchanges in the law.
ASAE made repeal its #1 issue especially at its recent fly-in (see "Association pros storm Capitol Hill," 4/31). ASAE sent association executives to the Hill, prepared to discuss how important repeal was. Among them was Cheryl Ronk, CAE, president of the Michigan Society of Association Executives.
"I did a dance," Ronk said upon hearing the news on the provision. Ronk has worked for repeal for months, including contacting Sen. Debbie Stabenow (D-MI), who helped shepherd the House version of the bill that ultimately passed in the Senate.
"Not only does it impact associations and all of our vendors who support the association world, but every one of our associations' members," Ronk said.
She noted timing also was of great importance. Had repeal not passed in the early part of this year, associations would have had to start to prepare for the January implementation of the now-failed provision.
Other associations have expressed their approval of repeal. US Chamber EVP Bruce Josten called the provision "onerous," and said repeal "is a positive step toward reducing the overreach of government and allowing the private sector to help guide our economic recovery."
American Subcontractors Association 2010-11 president Timmy McLaughlin said, “Congress heard the concerns of ASA members across the country and made the right decision: to eliminate the new 1099 reporting burdens before they started really hurting subcontractors.”
Associated Builders and Contractors 2011 chairman Michael Uremovich called for Obama to sign the repeal bill swiftly. "Delaying action on this measure will not help facilitate a speedy economic recovery," he said.