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Agreement on Health Care, Small Business Tax Bills Ready To Be Voted On By House and Senate

Thursday, August 1, 1996

Deloitte & Touche OnLine

The conference agreements on the small business tax bill (HR 3448) and the health insurance reform bill (HR 3103, S 1028) are complete and are ready to be voted on in Congress.

The House will consider the health care reform bill beginning Thursday afternoon and will not take up the small business bill until Friday. The Senate will follow the House and could begin consideration of the bills late Thursday or Friday.

In a statement issued late Wednesday, President Clinton expressed support for the health insurance reform bill. The agreement is a "long overdue victory for the millions of Americans who live in fear of losing their health insurance when they change or lose their jobs," he said.

A preliminary review of the health insurance reform agreement includes the following tax provisions:

• Disallowing the interest deduction for corporate-owned life insurance policy loans on interest paid or accrued after Oct. 13, 1995. The phase-out disallowance is 100 percent in 1996, 90% in 1997, and 80% in 1998. Also a borrowing cap of 20,000 lives would be imposed.
• Expatriation provisions that become effective Feb. 2, 1995.
• Elimination of the interest allocation exception for certain non-financial corporations.
• Phased-in increase to 80% of the self-employed health insurance deduction.

Small Business Tax Bill: Clinton also is expected to sign into law the small business tax bill, which increases the minimum wage by 90 cents per hour. Preliminary revenue estimates show that the size the conferees agreed to contain about $22 billion in tax increases and about $18 billion in tax benefits.