Lowering Health Care Premiums: Legislative Moves and Regulatory Changes
On December 17, the U.S. House of Representatives passed H.R. 6703, known as the "Lower Health Care Premiums for All Americans Act," in a decision marked by partisan lines. This comprehensive bill impacts several healthcare components, including AI-driven prior authorization delays, pharmacy benefit management services, and association health plans. A critical amendment targets Section 9815 of the Tax Code, particularly the integration of health reimbursement arrangements with individual market coverage. However, it omits extending the augmented tax credits for Affordable Care Act (ACA) premiums, set to expire in 2025.
The bill's absence of tax credit extensions prompted a discharge petition led by four Republicans alongside all Democrats to seek a three-year extension. This action underscores a break within party lines, spotlighting dissatisfaction over not voting on a proposed amendment combining tax credit extensions with regulatory compliance requirements. If successful, the petition could urge the House Speaker to initiate a vote, positioning potential bipartisan negotiations in the Senate to facilitate a shorter extension with supplementary health policy reforms.
Upcoming Legislative Sessions and Health Policy Focus
With Congress now adjourned for the year, the Senate will convene again on January 5, followed by the House on January 6. House Speaker Johnson stated that healthcare policy, including payer-provider dynamics and risk management enhancements, will be a priority in the coming months. Nonetheless, there is ambiguity about the near-term passage of a reconciliation bill.
Regulatory Developments in Tax and International Policy
In a significant regulatory move, the Treasury and IRS released final regulations on December 18 regarding "qualified derivative payments" under the Base Erosion and Anti-Abuse Tax (BEAT). These clarifications pertain to how payments related to securities lending transactions are treated, emphasizing regulatory compliance and accurate reporting. Payments in such transactions can qualify as non-base erosion payments under these updated guidelines.
The final regulations largely mirror earlier proposals issued in 2025, refining security lending transaction definitions and the treatment of payments to foreign parties. These BEAT regulations will apply to taxable years commencing on or after the publication date, allowing for early adoption if desired. Concurrently, potential reforms from the OECD related to the G-7's agreement under Pillar 2 may soon impact U.S.-based companies, offering exemptions from certain global tax measures.
IRS Provisional Measures and Legal Challenges
The IRS has provisionally allowed an alternative certification method for the section 45Q tax credit due to anticipated delays in the EPA's electronic reporting tool. This provision is applicable for 2025, with forthcoming regulations expected to detail post-2025 credit claims. Concurrently, a lawsuit has been initiated against IRS Notice 2025-42, which removes the 5% safe harbor for wind and solar projects. The litigation, brought by environmental and consumer groups, argues that this change introduces an unfair disadvantage, potentially influencing future underwriting and project financing strategies.