On March 31, the House Ways and Means Committee approved, 22-14, H.R. 1232, a bill to eliminate certain tax benefits relating to abortion. The Select Revenue Measures Subcommittee held a hearing on similar legislation, the No Taxpayer Funding for Abortion Act (H.R. 3), on March 16 (see The Source, 3/18/11); the House Judiciary Committee approved the measure on March 3 (see The Source, 3/4/11).
As amended, the bill, sponsored by Chair Dave Camp (R-MI), would amend the Internal Revenue Code (IRC) to disallow the costs incurred for abortion services from the tax deduction for medical expenses. The costs also would not be taken into account in determining whether the individual has met the 7.5 percent of adjusted gross income threshold for medical expenses that qualify for the deduction.
The bill would amend the definition of “qualified health plans” under the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) to exclude plans that cover abortion. As a result, premium assistance credits – refundable tax credits for the purchase of health insurance through a health insurance exchange – could not be used to purchase plans that cover abortions.
The bill would not restrict individuals from purchasing separate abortion coverage as long as the premium assistance credits were not used to do so; non-federal health insurers still would be able to offer plans with abortion coverage as long as they are not paid for using premium assistance credits.
Under the bill, any amounts small businesses pay toward the cost of insurance plans that cover abortion would not be considered in determining whether the employer is eligible for small business employer health insurance tax credits as provided by the PPACA.
For the purposes of health flexible spending arrangements, health savings accounts, and Archer medical savings accounts, amounts paid for abortion services would be included in gross income. Current law excludes from gross income the value of coverage under an employer-provided health plan for employees.
The bill’s provisions would not apply in instances where costs for abortion services were incurred in the case of rape, incest, or to protect the life of the mother as certified by a physician.
During consideration of the bill, the committee rejected, 14-22, an amendment by Rep. Joseph Crowley (D-NY) to block implementation of the bill if it is determined that the bill would raise taxes.
