Sen. David Vitter has demanded that the IRS explain why Congress, with more than 12,000 employees and dependents, is classified as a “small business” for purposes of the Affordable Care Act.
The Louisiana Republican sent a letter to John Koskinen, Commission of the IRS, asking if the classification, which allows Congressional employees to buy subsidized health care through the District of Columbia Exchange, is a violation of federal tax law.
Vitter, who chairs the Senate Small Business Committee, noted that Congress had sent the IRS a tax form designating itself as an Applicable Large Employer, yet it registered as a small business on the D.C. exchange.
Following the ACA’s passage in 2010, an amendment required congressional employees to obtain insurance through an exchange but did not provide subsidies to offset any portion of the expense. Previously the employees had enjoyed generous health benefits at little or no cost.
In 2013, the Office of Personnel Management (OPM) issued a regulation leaving employment issues up to each member of Congress. The agency said members of Congress could “determine which of their staff are eligible for a Government contribution towards a health benefits plan purchased through an appropriate Small Business Health Options Program (SHOP).”
The OPM specified that Congress should be treated as a small business for purposes of the ACA. This allowed employees to obtain health care on the D.C. exchange and qualify for subsidies.
“Given that Congress has registered itself with DC Health Link as a small business, yet has declared to the Internal Revenue Service it is a large employer, it would appear that it is misrepresenting itself to either the DC Health Link or to the IRS,” Vitter wrote to the Commissioner. “It cannot be both a small employer and a large employer. It is utterly absurd that Congress is trying to be both.”
The IRS said it is reviewing Vitter’s letter and will respond to him.
A year ago the Senate rejected an attempt by Sen. Vitter to subpoena executives of the D.C. health exchange on the same issue.
