Not all of HR 3962 (the “Bill”) is about reducing the cost of healthcare. Some parts actually increase the overall cost to the government by reducing taxes that individuals would otherwise pay. Of course, this loss in revenue is either made up from other provisions of the Bill or accounted for its overall net cost.

Section 571 of the Bill amends Section 106 of the Internal Revenue Code (“IRC”) to expand the definition of “eligible beneficiary” to include anyone who is “eligible to receive benefits or coverage under an accident or health plan.” The essential effect of this is to bring domestic partners (same-sex or unmarried heterosexual arrangements) within the scope of a few Internal Revenue Code provisions.

The IRC currently excludes from gross income any benefits received by an employee and his or her dependants and spouse. If the employer’s group health plan allows coverage for domestic partners of unmarried employees, the cost of that coverage to the employer would be included in the gross income of the employee, since the coverage extends to a person (the domestic partner) who is not a spouse of the employee.

The change made by the Act would exclude the cost of the coverage for the domestic partner from the gross income of the employee, thereby eliminating it from taxation.

There is no comparable provision in the Senate Bill.