Yesterday’s final rule eliminating BOI reporting requirements for US persons or entities is a big win, but the fight over the Corporate Transparency Act is far from settled. Congress is considering legislation that would provide permanent relief for Main Street, while the Supreme Court will decide soon whether to hear a constitutional challenge to the law.
On the other hand, proponents of this unprecedented information grab have not abandoned their cause and appear to be pursuing beneficial ownership reporting one industry at a time. For now, they’ve turned their attention to health care.
The Senate HELP Committee recently advanced the Patients Deserve Price Tags Act, legislation intended to increase transparency in health care pricing. Buried within the bill, however, is a mandate that looks familiar to anybody who has followed the Corporate Transparency Act debate.
Under Section 6 of the committee-passed bill, every health insurer offering coverage in the individual or group market would be required to submit to federal and state regulators, and make available to the public, the following:
“the name and business address of each person or entity that, with respect to such plan or coverage… has an ownership or investment interest; has a controlling interest; is a management services organization; or is a significant equity investor.”
The disclosure would begin one year after enactment, be refreshed every quarter whenever the information changes, and be backed by civil monetary penalties of up to $300 per covered individual per day or $10 million, whichever is less.
Nor does the mandate appear to be limited to insurers. Identical disclosure language is sprinkled throughout the bill and applies to hospitals, clinical laboratories, imaging providers, and surgical centers, each of which would be required to post its ownership roster. So even as we make progress rolling back the CTA at the administration level, the Senate is attempting to recreate the law, industry by industry.
In one important respect this version goes further than the CTA ever did. Ownership information reported under the CTA at least sat in a government database subject to access restrictions. Here, the names and addresses of owners and investors would be published for anyone to see.
Supporters will argue this is simply another health care transparency measure. But requiring health care operators to publicly identify their owners, investors, and management goes well beyond helping consumers compare prices or understand their coverage. An ownership roster tells a patient nothing about what an MRI costs.
Fortunately this proposal still has a long way to go. The ownership disclosure language cleared the Senate HELP Committee, but the House version ditches the provision, meaning this issue is likely headed for a conference fight.
Main Street businesses have already made clear where they stand on the CTA. Congress should reject this latest attempt to revive beneficial ownership reporting through the back door.