Small business may still get one of the things it wanted most from healthcare reform last year: the restoration of a 25% healthcare insurance deduction for the self-employed. It may even be retroactive.
Congressional Republicans are moving quickly to restore the tax provision and apply it to 1994, before the April 15 tax filing deadline.
The 25% deduction expired Dec. 31, 1993.
Last year, Congress was expected to reauthorize the deduction, and possibly even raise it to 100% as part of healthcare reform. Nearly all the major reform plans introduced included some provision for the deduction.
Partly as retribution for the opposition of small business to healthcare reform, the Democrat-controlled Congress did not renew the provision.
But with Republicans now in command in Congress, the provision is alive again. House Ways and Means health subcommittee Chairman Rep. William Thomas (R-Calif.) introduced legislation late last month that would allow self-employed individuals to deduct 25% of the cost of their healthcare insurance for 1994.
Thomas said a majority of House members have agreed to the measure, and the Senate soon will introduce a similar measure.
Thomas also said he intends to introduce other legislation later in the year to increase the deduction, possibly to as high as 80%.
One stumbling block is the cost, which would be $2 billion over five years, according to Congressional Budget Office estimates.