Business groups are fighting back against the Department of Labor’s (DOL’s) proposed rescission of the rules governing association health plans (AHPs). The groups say AHPs are a way to make affordable health insurance accessible to small businesses and self-employed individuals.

On February 28, Senate Republican Leader Sen. Mitch McConnell (R-KY) announced he would step down as leader of the Senate Republicans in November. The longest-serving Senate leader in U.S. history, Sen. McConnell said he would continue as the Senate’s Republican leader for the rest of this year (at least until the chamber’s GOP Senators elect a new leader after the November general elections). He also said he would finish his Senate term—that is until the end of 2026.

In February, Rep. Brad Finstad (R-MN) introduced the House companion bill of the Prove It Act with Reps. Yadira Caraveo (D-CO) and Nathaniel Moran (R-TX). Senate Small Business and Entrepreneurship Committee Ranking Member Joni Ernst introduced the companion legislation last year. The Prove It Act aims to give small entities a seat at the table during the regulatory process and aims to limit regulatory burden on small businesses.

On January 18, just one day before the deadline after which the government would have begun its partial shutdown, the Senate passed a continuing resolution (CR) that extends current government funding levels until March 1 for four of the 12 appropriations bills and March 8 for the remaining eight. The vote was 77 to 18. Just hours later, the House followed suit, passing the measure under suspension of the rules. The vote was 314 to 108. President Biden signed it into law on January 19.

On January 31, the House of Representatives passed a $78 billion tax package, H.R.7024, the Tax Relief for American Families and Workers Act. The bill contains some provisions that may be helpful to NAIFA members, i.e., increased expensing, a higher reporting threshold, and larger business loan interest deductibility. It also contains, as an offset, a provision that cuts off new ERTC claims.

The individual income, capital gains, and estate tax rules enacted in 2017 expire at the end of 2025. These were significant tax cuts and already Congress and the private sector are gearing up for a major battle over which of these rates and rules should be extended or allowed to sunset. One such rule that is key to many NAIFA members is section 199A, the 20 percent deduction for certain noncorporate business income.

A coalition of small business groups is urging Congress to extend by 90 days the proposed cut-off of employee retention tax credit (ERTC) claims. The Coalition to Preserve American Jobs is arguing that cutting off claims on January 31 would be “slamming the door on many eligible small business owners” right as the tax filing season begins.

On February 7, Rep. Richard Neal (D-MA), ranking member of the House Ways & Means Committee and a chief architect of SECURE and SECURE 2.0, reintroduced his automatic IRA program bill. The bill would impose a penalty tax on employers with more than ten employees that do not have a retirement savings plan in place if they do not set up an automatic enrollment IRA program (or another form of automatic contribution retirement savings plan) for their workers. The bill would not require employer contributions. It would allow employees to opt-out. And it provides a tax credit for small employers to defray the administrative cost of the program.

The Death Tax Repeal Act (H.R. 7035) was introduced in the House of Representatives on January 18. The bill has more than 160 cosponsors (although all but one are Republican). Its primary author is Ways & Means Committee member Rep. Randy Feenstra (R-IA).

On February 1, 2024, Representative Brad Finstad (R-MN) introduced the bipartisan Prove it Act in the U.S. House of Representatives. Senate Small Business and Entrepreneurship Committee Ranking Member Joni Ernst introduced the companion legislation last year. The Prove It Act aims to give small businesses a seat at the table during the regulatory process and aims to limit the regulatory burden on small businesses.

Repeating their testimony at a DOL hearing last month in comments submitted to DOL, industry advocates told a January 10 House hearing that the DOL’s fiduciary-only proposed regulations must be withdrawn. Fifty House members wrote to DOL demanding the rule’s withdrawal. DOL must sift through 19,000+ comments on the rule.

On January 9, the Department of Labor (DOL) released its new, final independent contractor classification regulation. It largely follows the proposed rule, imposing an economic reality based on the totality of the circumstances test to determine whether a worker is an employee or an independent contractor. It contains no industry or occupation exceptions or carve-outs. The rule is effective on March 11, 2024.

On January 5, President Tom Cothron submitted comments to the Centers for Medicare & Medicaid Services (CMS) on behalf of all NAIFA members to express concern over a proposed rule change regarding the Medicare Advantage and Medicare Part D programs.

When the first session of the 118^th Congress ended last month, lawmakers left undone controversial and pressing business that will make January a difficult month. Pending are government funding, international aid, and expiring law issues on which there is as yet little or no consensus. Caught in the crosshairs are a tax package with provisions of interest to NAIFA members, extension of the National Flood Insurance Program (NFIP), and proposals to defund regulatory initiatives like the fiduciary-only rule.

Last month, Congress’ Joint Committee on Taxation (JCT) released its annual “tax expenditure report.” This is a list of many tax code rules that result in the government not collecting tax on what would otherwise be taxable income. Many of these rules directly benefit life and health insurance, retirement savings, employer-provided benefits, and general investments.

Treasury and the Internal Revenue Service (IRS) have announced increased enforcement in connection with employee retention tax credit (ERTC) claims. The agencies are warning about more scrutiny as a result of what they call massive fraud in the pandemic-era tax rule. Now, some in Congress are pushing back, concerned that legitimate claims are not being paid as a result of this increased scrutiny. In addition, Congressional tax writers are looking at the ERTC as a possible source of offsetting revenue for the emerging tax bill (see story below).

Currently there are two principal tracks for tax legislation in 2024. The first is an emerging $78 billion package aimed at providing a combination of business and individual tax relief in certain discreet areas. The second is a bigger picture bill that would address the fact that more than half the tax code is scheduled to expire at the end of 2025. Both have significant implications for NAIFA members and their clients.

On January 8, President Biden officially renominated Julie Sue as Secretary of Labor. Su failed to win the votes needed to confirm her last year, but Senate leadership pulled her nomination from the floor rather than allowing a vote against her. Su is currently serving as acting DOL Secretary.

At the NAIC’s Fall Meeting in Orlando, Florida (November 30 – December 3), NAIFA’s Policy Director Roger Moore testified against the Department of Labor’s proposed fiduciary-only rule during the Life and Annuities (A) Committee meeting, commenting that the rule will harm lower- and middle-income families. Moore was joined by representatives from coalition partners in expressing strong support for the NAIC’s efforts opposing DOL’s actions.

NAIFA testified on the first day of the two-day (December 12-13) Department of Labor (DOL) fiduciary rule hearing. President Bryon Holz, who appeared with one of his clients, represented NAIFA, telling DOL of the harm its proposed rule would cause for middle-income retirement investors. NAIFA will also submit formal comments to the DOL ahead of the January 2 deadline for close of comments.