Health reinsurance plan and key tax conformity provisions the legislative priorities for 2019
FOR IMMEDIATE RELEASE
Contact: Mike Hickey, Minnesota State Director, 651-235-7401, [email protected]
ST. PAUL, Minn., Jan. 7, 2019—“Making critical tax conformities and continued funding of Minnesota’s successful health insurance reinsurance plan are the top priorities for NFIB in the 2019 legislative session,” said Mike Hickey, NFIB’s Minnesota state director.
“With the election of a new governor, hopefully, we can finally address some of the important tax conformity issues that Minnesota is far out of conformity on,” said Hickey. They include:
1. Finally conforming or making significant progress on section 179 conformity.
The new federal tax law now allows up to $1 million to be deducted on equipment purchases, but Minnesota only allows a meager $25,000 per year with the balance amortized over the following five years. “We are far out of conformity on this critical provision for businesses and farmers. Hopefully, there will be bipartisan agreement to conform or make significant progress this year,” said Hickey.
2. Conform or make significant progress toward conforming on the federal estate tax exemption.
Minnesota is also far out of conformity on this critical provision, allowing only a $3-million-per-person exemption effective in 2020 while the federal limit has now risen to $11.4 million per person. “This is a critical provision for family held small businesses and farms that want to pass a tradition of entrepreneurship or farming on to family members,” said Hickey.
3. Enact other critical tax conformity provisions that will help bridge the Minnesota tax code to the new federal law.
“Filing 2018 taxes is not going to be easy for many Minnesotans. Hopefully, critical tax conformity language can be enacted for future years”
4. Continuation of state’s successful reinsurance plan of health insurance
NFIB also supports continuing our very successful reinsurance plan that saved the individual health insurance market in the state and significantly lowered premiums for the small employers and other individuals in this market in 2019. Hickey noted the recently approved 2019 rates from the remaining insurers in the market ranged from a 3 percent to 12 percent average reduction with one insurer offering up to a 28 percent reduction!
“This is a far cry from what we saw in 2017 when the average increases ranged from 50 percent to 67 percent and insurers were seriously considering pulling out of the Individual health insurance market,” said Hickey. “That came after two previous years of large increases and many individuals being forced to purchase extremely large deductibles, some as high as $10,000 per year, rendering their insurance almost worthless. It is very encouraging that the Trump administration has made a commitment to provide significant reinsurance funding for the Minnesota plan through 2022, and it’s time for the State Legislature to step up and continue funding the state’s share of this successful plan.” The state has committed funding for the plan for this year.
NFIB will also be a strong voice in opposition to new employer mandates such as mandatory paid family leave and sick leave and will also strongly support a badly needed preemption bill that prohibits local units of government from enacting all sorts of new mandates on local employers.
###
For more than 75 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is nonprofit, nonpartisan, and member-driven. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com.
NFIB Minnesota
380 Jackson St., Suite 780
St. Paul, MN 55101
651-293-1283
NFIB.com/MN
Twitter: @NFIB_MN
