The $856 billion health care reform proposal released Sept. 16 by Senate Finance Committee Chairman Max Baucus (D-Mont.) does not require that employers provide health care benefits. Starting in 2013, however, companies with more than 50 workers that do not offer health coverage would have to reimburse the federal government for each full-time employee receiving a health care affordability tax credit in the new health care exchanges designed to help individuals find affordable policies.

While there is no provision to prevent employers from dropping coverage, committee staff members said most employers believe that providing coverage gives them a competitive advantage in attracting and retaining the best workers.

Under the proposal, businesses with fewer than 25 employees and average annual wages of less than $40,000 could receive credits up to 35 percent for tax years 2011 and 2012. Annual contributions to flexible spending accounts would be limited to $2,000 and FSA funds could not be used to buy over-the-counter medications without a prescription.

The Senate Finance Committee is scheduled to start debating the proposal on Sept. 22.

For a copy of the legislation, click here.