P. M. BRIEFING : House Suspends Health Plan Tests

The House today approved a one-year suspension of a tax rule on health plans that business groups claim is so costly and complex to administer that it threatens the ability of some companies to stay in business.

The lawmakers’ 376-26 approval of legislation containing the suspension of so-called Section 89 is unlikely to be the last word on the subject from Capitol Hill. Later this summer or fall, Congress plans to act on legislation that would simplify--but not repeal--the rule’s requirements.

Section 89 establishes a series of tests that employers must go through to prove that their health plans do not favor higher-paid workers. The goal of the requirement, enacted in 1986, is to expand the number of employees covered by health insurance.

Many business groups have claimed that the rules are so hard to follow that some companies would be forced to drop health plans altogether. The rules were to take effect last Jan. 1 but became such a source of controversy that the Treasury Department delayed their implementation until Oct. 1.