Senate leaders have put pension reform, Medicare and tax administration provisions in the new budget package, the “Bipartisan Budget Act of 2018″ (BBA) legislation.
Members of the Senate are debating the BBA package on the Senate floor now.
Senate Majority Leader Mitch McConnell and Senate Democratic Leader Chuck Schumer developed the BBA package in an effort to keep the government from shutting down at midnight tonight, and, possibly, to establish a two-year budget agreement.
The package could also be a tugboat that could pull other, unrelated bills through Congress.
The BBA package is a Senate response to the House “Further Extension of Continuing Appropriations Act, 2018″ (FECCA) package. Members of the House passed that package by a 245-182 vote Tuesday.
Here are five BBA provisions that could affect financial professionals who help clients with taxes, Medicare or retirement income planning.
1. Section 41106: Form 1040SR for Seniors
This section could lead to the creation of a simple tax form, similar to the Form 1040EZ, that people ages 65 and older could use even if they had income from Social Security, or distributions from annuities or retirement plans.
2. Section 41104: Individuals Held Harmless on Improper Levy on Retirement Plans
The Internal Revenue Service sometimes gets penalty money from individuals by taking cash from the individuals’ retirement accounts. In some cases, the individuals appeal and get some or all of the money back.
If this provision became law, individuals who got retirement plan penalty money back from the IRS could return the money to the original retirement plans, or put the money into individual retirement accounts, without paying penalties.
3. Title IV, Subtitle A: Joint Select Committee on Solvency of Multiemployer Pension Plans
This section would create a new congressional committee that would try to come up with a proposal for addressing funding problems at multiemployer pension plans.
The committee would have 16 members, with half of the members coming from the Senate and half from the House. Half of the members from each House would be appointed by the majority party, and half by the minority party.
(Image: Centers for Medicare and Medicaid Services)
The committee would have to hold at least five public meetings or hearings, including three public hearings.
Drafters want the committee to come up with a multiemployer pension proposal the Senate can vote on by the end of the current congressional term, in 2020.
4. Section 53112: Preventing the Artificial Inflation of Star Ratings After the Consolidation of Medicare Advantage Plans Offered by the Same Organization
Medicare Advantage plan quality ratings, or “star ratings,” affect how much money the plan issuers get from the federal government.