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Sen. Franken Leads Effort To Delay Healthcare Reinsurance Tax

Bipartisan effort would allow for a three-year delay in implementation of "belly button" tax

Minnesota Senator Al Franken, in bipartisan action with Illinois Senator Mark Kirk, on April 11 introduced legislation (S. 2253) for a three-year delay in implementation of an employer-paid $63 per-person tax provided for under federal healthcare reform. The tax funds a temporary "reinsurance" program that not all businesses are eligible to participate in, creating a situation where some retailers pay in to the program but receive no benefit.


In introducing his Health Care Fairness and Stability Act of 2014, Senator Franken said, "My number one concern is to make sure the Affordable Care Act works for the people of Minnesota. We need to keep moving forward and fix the things that aren't working. Businesses and workers all over Minnesota are concerned about this. Our bipartisan bill would provide relief to employers and workers, and it helps keep costs down for businesses across the country."


"At a time when retailers are digesting the impact of federal healthcare reform on their operations, we appreciate Senator Franken's leadership on an effort to delay the collection of the transitional reinsurance tax. We are hopeful that the Senator's effort will allow the time needed to find a better, fairer funding mechanism for this program," commented Minnesota Retailers Association president Bruce Nustad.

Retailers and employers of all size are negatively impacted by this tax, sometimes referred to as the "belly button" tax because it is assessed for each employee, spouse, dependent and retiree covered by a fully-insured or employer-sponsored, self-insured group health plan. In addition to delaying implementation of the tax, the Health Care Fairness and Stability Act of 2014 proposes to reduce the amount collected for the program by aligning the tax with the actual financial need of the program.  Also, in the U.S. House, bipartisan legislation (H.R. 3489) was introduced last November to repeal the fee.

The Minnesota Retailers Association thanks Senator Franken and co-sponsor Senator Amy Klobuchar, as well as the International Franchise Association, National Retail Federation, and Retail Industry Leaders Association for leadership on this issue.

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About the Author

Bruce Nustad

Bruce Nustad is president of the Minnesota Retailers Association.

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