It has just been discovered that the health care reform bill contains another mandate that will bury businesses in a mountain of new paperwork. It will also cause the IRS to hire hundreds, possibly thousands, of people to manage the influx of new 1099’s. There is a tax code section in the health care bill, and with a few words changed regarding 1099 reporting, millions of businesses will be forced to issue billions of additional 1099’s each year. https://higginscompanies.com/health-insurance/group-health-insurance/
It will now be required that all businesses that spend $600 or more with anyone or any business must file a separate 1099 each year for that vendor. This will mean collecting each vendor’s tax information, have separate accounting, and send a copy of the 1099 to each vendor and the IRS at the end of the year. When you go to pay your rent on the office space you lease it will now be required to file a 1099. What about paying your Arizona group health insurance premium, is a 1099 now required? It sure looks that way. Imagine being on the receiving end of all of these new 1099’s flooding offices large and small. Matching up hundreds or thousands of 1099’s at the end of the year with each sale or transaction of $600 or more will surely lead to mistakes and mismatches, resulting in costly fights with the IRS.
Again we are left scratching our heads, wondering what 1099’s have to do with health insurance. It is one more example of the Pelosi camp sneaking in a little code into the health care bill in hopes of raising more money. The cost of implementing this new rule will be extremely expensive for businesses, not to mention for the government as well.
Michael Higgins
602.405.8769
An Arizona health insurance broker.