Bipartisan bill would repeal “belly button tax”

Reps. Pat Tiberi (R-Ohio) and Daniel Lipinski (D-Ill.) introduced a bipartisan bill on Thursday that would repeal the Affordable Care Act’s reinsurance fee, which is often referred to as the belly button tax.

The reinsurance fee is designed to support the Obama Administration’s reinsurance program, which allocates payments to insurance companies to offset high-cost enrollees.

“This covers every health insurance recipient, not just the policy holder,” Tiberi said. “It’s a fee faced by every one that provides health insurance and they will most certainly pass on the cost to their employees and customers when they can. It’s simply outrageous that employers will be forced to pay the tax while they will get nothing in return from the program.”

The three-year reinsurance program is funded at $25 billion. It will impact an estimated 190 million citizens and the average fee would be approximately $63 per health receipt in 2014.

The cost of the reinsurance fee could adversely affect employer-sponsored coverage in the future. Some employers have already dropped coverage for spouses of employees because of it, according to opponents of the fee.

The Department of Health and Human Services recently announced a plan to provide an exemption from the reinsurance fee for “certain self-insured, self-administered plans” for the 2015 and 2016 benefit years.

“The administration’s intention is too little, too late,” Tiberi said. “A delay or exemption does not change the fact that the overwhelming majority of employers will still have to pay this tax. At a time when so many families are losing the insurance they have and like, we need to provide stability and security, not provide another incentive for employers to discontinue their coverage.”