HEARING ADVISORY: Boustany Announces Hearing on Small Business Health Insurance Tax Credit

November 15, 2011 — Hearing Advisory   

Congressman Charles W. Boustany, Jr., MD, (R-LA), Chairman of the Subcommittee on Oversight of the Committee on Ways and Means, today announced the Subcommittee will hold a hearing on the Small Business Health Insurance Tax Credit created by the Patient Protection and Affordable Care Act.  The hearing will take place on Tuesday, November 15, 2011, in Room 1100 of the Longworth House Office Building, beginning at 10:30 A.M.

In view of the limited time available to hear witnesses, oral testimony at this hearing will be from invited witnesses only.  However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing.  A list of invited witnesses will follow.


The Patient Protection and Affordable Care Act (Pub. L. No. 111-148) (PPACA) included a limited-time tax credit to encourage small businesses to provide health care coverage to employees. The Small Business Health Insurance Tax Credit (Small Business Tax Credit) is available to certain small businesses and covers some of the cost of employee health insurance.

The Small Business Tax Credit covers 35 percent of an eligible small employer’s contribution to employee health insurance premiums for each tax year from 2010 to 2013.  After 2013, the credit amount increases to 50 percent, but a taxpayer may only elect to take the credit for two consecutive tax years.  The calculation to determine eligibility is a complex sliding scale involving employee hours of service and wages, along with certain exclusions.

As the costs of health insurance continue to rise, it remains unclear whether the Small Business Tax Credit is beneficial to a meaningful number of small businesses or whether the Internal Revenue Service (IRS) is administering the credit appropriately.  Due to the complex calculations associated with the Small Business Tax Credit, government watchdogs have warned that it leaves room for calculation error and opens the door to potential tax fraud.  A recent report by the Treasury Inspector General for Tax Administration found that only 228,000 taxpayers took advantage of the credit as of May 2011, despite earlier claims by the Administration that four million employers would be eligible.  The Inspector General also found that the manner in which the IRS is administering the credit has created concerns over tax compliance.

In announcing the hearing, Chairman Boustany said, “Much of the President’s new health care law will be administered by the IRS, and this is the first credit provision to come into effect.  With small businesses hurting from a stalled economy and rising health insurance premiums, the Oversight Subcommittee will explore whether the Small Business Tax Credit is providing meaningful help to employers or if it is opening the door to more improper payments.”


The hearing will focus on whether small business employers are currently benefitting from the Small Business Tax Credit, problems they may be encountering when calculating the credit, and whether the IRS is administering it in a way that ensures tax compliance.


Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee website and complete the informational forms.  From the Committee homepage, https://waysandmeans.house.gov, select “Hearings.”  Select the hearing for which you would like to submit, and click on the link entitled, “Click here to provide a submission for the record.”  Once you have followed the online instructions, submit all requested information.  ATTACH your submission as a Word document, in compliance with the formatting requirements listed below, by the close of business on Tuesday, November 29, 2011.  Finally, please note that due to the change in House mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings.  For questions, or if you encounter technical problems, please call (202) 225-1721 or (202) 225-3625.


The Committee relies on electronic submissions for printing the official hearing record.  As always, submissions will be included in the record according to the discretion of the Committee.  The Committee will not alter the content of your submission, but we reserve the right to format it according to our guidelines.  Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response to a request for written comments must conform to the guidelines listed below.  Any submission or supplementary item not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.

1. All submissions and supplementary materials must be provided in Word format and MUST NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official hearing record.

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. Instead, exhibit material should be referenced and quoted or paraphrased.  All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.

3. All submissions must include a list of all clients, persons and/or organizations on whose behalf the witness appears.  A supplemental sheet must accompany each submission listing the name, company, address, telephone, and fax numbers of each witness.

The Committee seeks to make its facilities accessible to persons with disabilities.  If you are in need of special accommodations, please call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four business days notice is requested).  Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.

Note: All Committee advisories and news releases are available on the World Wide Web at http://www.waysandmeans.house.gov/.