In addition to funding the federal government for fiscal year (FY) 2016, the Consolidated Appropriations Act, 2016 delays three major Affordable Care Act taxes, suspends country-of-origin labeling (COOL) for certain muscle cuts of meat, and includes the controversial Cybersecurity Information Sharing Act (CISA), which contains provisions to enhance cybersecurity in the health care industry. On December 18, 2015, the Appropriations Act (H.R. 2029) was passed by both the House and Senate, and signed into law by President Obama.
ACA tax changes. The Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) implemented many new taxes, including taxes levied on employers who provide high-cost health care insurance to their employees, health insurance providers, and the sale of certain medical devices. The “Cadillac” tax, section 9001 of the ACA, will impose a 40 percent excise tax on high-cost employer-sponsored health coverage, with the goal of keeping overall health insurance costs low by discouraging high-cost plans. The Appropriations Act delays the Cadillac tax for two years, until 2019, and changes the tax code to allow employers to deduct Cadillac tax penalties against their corporate income tax. Section 9010 of the ACA created an annual fee on health insurance providers, based on the amount of health insurance premiums received. The Appropriations Act includes a moratorium on the annual fee for 2017. Lastly, section 1405 of the ACA’s Reconciliation Act (P.L. 111-152) imposed a 2.3 percent excise tax on the sale of medical devices to help finance the ACA. The Appropriations Act puts a two-year moratorium, for 2016 and 2017, on the medical device excise tax.
Menu labeling delay. Section 4205 of the ACA required certain restaurants and retail food establishments to disclose nutrition information for standard menu items. The Appropriations Act delays enforcement of the menu-labeling Final rule (79 FR 71156) until the later of December 1, 2016, or the date that is one year after the date on which the HHS Secretary publishes Level 1 guidance with respect to nutrition labeling of standard menu items in restaurants and similar retail food establishments.
Cybersecurity Act of 2015. The Appropriations Act includes a final version of CISA, which will make it easier for private companies to share personal information with the government in cases of cybersecurity threats. Rep. Zoe Lofgren (D-Cal) voted against the Appropriations Act, saying CISA is “an extraneous provision purported to facilitate cybersecurity information sharing that—in effect—will function as a surveillance tool.” The CISA rider requires the HHS Secretary to report to Congress on the preparedness of the Department and health care industry stakeholders to respond to cybersecurity threats, to create a Health Care Industry Cybersecurity Task Force, and to work with the Department of Homeland Security to align security approaches across the health care industry.
COOL. The COOL statute (7 U.S.C. §1638a) assigns retailers an obligation to inform consumers of the country of origin of meats sold in their establishment. This obligation can be quite complicated where an animal was born, raised, and slaughtered in more than one country. A 2013 Final rule (78 FR 31367) requires retailers of “muscle cuts” of meat, i.e., covered meat other than ground meat, to list the countries of origin and production steps—born, raised or slaughtered—occurring in each country. Canada and Mexico asked the World Trade Organization (WTO) for permission to retaliate against the U.S. COOL labeling requirements by imposing billions of dollars in tariffs; the WTO found that mandatory COOL violated U.S. treaty obligations. The Appropriations Act repealed the COOL requirements for muscle cuts of beef and pork, and ground beef and pork. The United States Department of Agriculture (USDA) announced the immediate cessation of enforcement of those COOL requirements. The agency further said that it plans to amend the COOL regulations “as expeditiously as possible to reflect the repeal of the beef and pork provisions.”
Life sciences appropriations details. The FDA will receive $2.73 billion in funding under the Appropriations Act, which is $132 million more than it received in 2015, and includes an increase for food safety programs. The Centers for Disease Control and Prevention (CDC) will receive $7.2 billion, up $308 million from the 2015 level. The Appropriations Act includes funding for the Combating Antibiotic-Resistant Bacteria (CARB) initiative.
Other health-related aspects. The Appropriations Act reauthorizes the World Trade Center Health Program for first responders injured on September 11, 2001. Despite Republican calls for a ban on all Planned Parenthood funding, the Appropriations Act does not defund the clinics, which will continue to receive some federal funding for women’s health care. The Act includes funding to prepare for a flu pandemic, including to help private companies build vaccine production facilities. It also increases National Institutes of Health (NIH) funding by 6.6 percent, to $32 billion. The Appropriations Act renews a provision requiring Medicare and Medicaid to pay for mammograms for women starting at age 40, despite federal recommendations that the breast cancer screenings can wait until women are 50.
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