WASHINGTON, D.C. – Today, U.S. Senators Mark R. Warner and Tim Kaine applauded the announcement that all 10 drug manufacturers whose drugs were selected for price negotiation with Medicare have agreed to participate in the Inflation Reduction Act’s Medicare Drug Price Negotiation Program. The Inflation Reduction Act, which the senators helped pass last year, allows the Centers for Medicare and Medicaid Services’ (CMS) to negotiate prescription drug prices for the first time in history, which will help lower costs for millions of Americans.
In August, CMS announced the first 10 drugs covered under Medicare Part D—among the costliest for the Medicare program without generic competition—that will be eligible for the program. The drug manufacturers had until October 1 to decide whether to participate in negotiations or face penalties. Nationwide, Medicare enrollees covered under Part D paid a total of $3.4 billion in out-of-pocket costs in 2022 for these 10 drugs. In Virginia, Medicare Part D enrollees have more than 193,000 active prescriptions for these 10 medications.
“Too many Americans aren’t able to afford the medications they need, and that’s why we fought to include a provision in the Inflation Reduction Act to allow Medicare to negotiate prescription drug prices,” said the senators. “Today’s announcement that all 10 drug manufacturers will participate in the Inflation Reduction Act’s drug price negotiation program is a positive step towards lowering prescription drug costs for millions of seniors. We’re glad that the program continues to progress and look forward to seeing its full impacts in the years ahead.”
Under the law, CMS will negotiate directly with drug companies, and the first set of negotiated prices will go into effect on January 1, 2026. CMS will then select up to 15 more Part D drugs eligible for negotiation for 2027 and will continue to build on this progress in subsequent years by negotiating prices of more prescription drugs. The Congressional Budget Office (CBO) has estimated that the drug price negotiation program will lower Medicare spending by $98.5 billion over 10 years.
Warner and Kaine have championed policies to lower the cost of prescription drugs and long fought to allow CMS and to negotiate drug prices for those on Medicare. The senators repeatedly introduced legislation to allow Medicare to negotiate the best price of prescription drugs for seniors enrolled in Medicare Part D. Additionally, Warner, a member of the Senate Finance Committee, helped author the Modernizing and Ensuring PBM Accountability (MEPA) Act, bipartisan legislation approved by the Committee in July 2023 to help address rising prescription drug prices by regulating the middlemen who manage prescription drug benefits on behalf of health insurers and which included key provisions authored by Warner.
Kaine, a member of the Senate Health, Education, Labor, & Pensions (HELP) Committee, previously introduced legislation that would allow Medicare to negotiate drug prices for Medicare Exchange plans, created under his Medicare-X Choice Act, and the Medicare Part D program. In May 2019, he gave a speech on the Senate floor highlighting stories from Virginians from Martinsville, Norfolk, Arlington, and Virginia Beach who have been hurt by the high cost of prescription drugs and calling for reforms to bring drug prices down. In May 2023, he voted to pass the bipartisan Pharmacy Benefit Manager Reform Act, legislation to lower drug costs, out of the HELP Committee. He has also authored and cosponsored bills to strengthen the pipeline and increase transparency for critical medicines and more efficiently usher drugs to the market by making key improvements to the Food and Drug Administration’s review process for interchangeable biosimilars.
WASHINGTON – Today, U.S. Sens. Mark R. Warner (D-VA) and John Thune (R-SD) urged the Internal Revenue Service (IRS) to more effectively promote educational assistance programs that would help alleviate the burden of student loan payments. Specifically, the senators are focused on efforts to make employers and employees aware of their Employer Participation in Repayment Act, which allows employers to contribute up to $5,250 tax-free to employees’ student loans annually through 2025.
“This provision within section 127 is a win-win for employers and employees, as it provides a pathway towards student loan debt relief for borrowers and provides employers with another option to recruit and retain talent necessary to grow their businesses,” the senators wrote.
In April of this year, Sen. Warner questioned IRS Commissioner Danny Werfel on the organization’s outreach efforts regarding benefits available to borrowers. During the exchange, Commissioner Werfel committed to devoting significant efforts to making taxpayers aware of these benefits. Since then however, little progress has been made to make employers and employees aware of these programs, which would greatly reduce stress of monthly payments for borrowers and help employees retain qualified candidates.
“During your testimony before the Senate Finance Committee on April 19, 2023, you stated that outreach on section 127, including ensuring that taxpayers are aware of such benefits, is a top priority of the agency,” the senators continued. “However, we have found that resources on educational assistance programs are difficult to locate on the IRS website. Additionally, within these hard-to-find and limited resources, the expansion of the program to include student loan debt as a qualifying tax-free educational expense is not highlighted as new information and the eligibility window is deeply buried. Furthermore, online IRS webinars have failed to adequately promote employer-provided educational assistance programs and call attention to student loan debt payments as a qualifying expense.”
The senators requested the IRS take a series of steps to better promote these programs and ensure that employers and employees are fully aware of the benefits afforded to them, including that:
- The IRS host and publish webinars on employer-provided educational assistance programs;
- The IRS publish new and robust resources to aide employers seeking to take advantage of section 127 benefits;
- And the IRS communicate expanded section 127 benefits and new resources to employers and employees, including, but not limited to, transmitting this information through IRS e-newsletters for business owners.
Created in 1978 and made permanent in 2012, section 127 of the IRS Code provides a tax benefit allowing employers to contribute up to $5,250 in tax-free annual assistance to employees pursuing continued education. In 2019, with broad bipartisan support, Sens. Warner and Thune introduced the Employer Participation in Repayment Act, legislation that extends this tax-free benefit to employees’ existing student loans. The senators played a key role in extending this provision through 2025 as part of the 2021 government spending package.
A copy of the letter can be found here and below.
Dear Commissioner Werfel,
We write to urge the Internal Revenue Service (IRS) to take meaningful steps to effectively promote educational assistance benefits provided under section 127 of the Internal Revenue Code, specifically the temporary provision within the law that allows employers to contribute up to $5,250 tax-free towards their employees’ student loans annually. This provision within section 127 is a win-win for employers and employees, as it provides a pathway towards student loan debt relief for borrowers and provides employers with another option to recruit and retain talent necessary to grow their businesses.
Nationwide, Americans owe more than $1.7 trillion in student loan debt, outstripping credit cards and auto loans as the country’s leading source of non-housing debt. With increased college costs leading to students taking on more debt, the need for innovative solutions to ease the burden of student loan debt is greater than ever. That is why we were pleased to secure passage of our Employer Participation in Repayment Act (EPRA), which reformed educational assistance programs under section 127 to include student loans payments as a qualifying educational expense.
Prior to this change, employers with educational assistance programs could provide their employees with up to $5,250 per year in tax-free benefits for ongoing education purposes (e.g., tuition and fees). The EPRA provision that we championed as part of the CARES Act amended section 127, expanding the $5,250 tax-free, annual benefit to include student loan payments through 2020, with subsequent legislation extending this benefit through 2025. In other words, as a result of this change in the law, employers are provided with an important tool to help their employees pay down outstanding student loan debt.
The modernization of section 127 better meets the needs of today’s workforce, as it not only helps individuals pay down their student loans, but also serves as a unique tool for employers to attract and retain talented employees. Additionally, employer-sponsored student loan repayment under section 127 helps employees get out of debt faster and put more of their hard-earned paycheck towards other necessities. While we were proud to champion this necessary expansion of section 127, as its sunset date approaches we want to make sure that we are maximizing the reach of this important benefit.
According to a 2023 survey of over 4,000 participants representing independent organizations, 48% of respondents indicated that their organization provides undergraduate or graduate tuition assistance. However, only 8% of responding organizations shared that they offer student loan repayment as an educational assistance benefit. This underscores the need for the IRS to use all tools at the agency’s disposal to increase awareness among employers about recent changes to section 127. Furthermore, the IRS should take steps to ensure that employers of all sizes have resources available to them to quickly form an educational assistance program for their workforce.
During your testimony before the Senate Finance Committee on April 19, 2023, you stated that outreach on section 127, including ensuring that taxpayers are aware of such benefits, is a top priority of the agency. However, we have found that resources on educational assistance programs are difficult to locate on the IRS website. Additionally, within these hard-to-find and limited resources, the expansion of the program to include student loan debt as a qualifying tax-free educational expense is not highlighted as new information and the eligibility window is deeply buried. Furthermore, online IRS webinars have failed to adequately promote employer-provided educational assistance programs and call attention to student loan debt payments as a qualifying expense.
To ensure that employers and employees are fully aware of the benefits afforded to them under section 127, we request that you take the following actions:
1) We request that the IRS host and publish webinars on employer-provided educational assistance programs. Webinars should provide details on student loan debt being a qualifying expense under section 127 and provide participants with the opportunity to engage in a meaningful Q&A session with IRS staff. Furthermore, webinars should be scheduled with adequate notice periods, promoted in conjunction with relevant stakeholders, including industry associations, and published prominently on the agency’s website for future reference.
2) We request that the IRS publish new and robust resources to aide employers seeking to take advantage of section 127 benefits. These new resources should include a sample written plan for employers to utilize and the addition of a ‘Frequently Asked Questions’ section on employer-provided educational assistance programs to the IRS webpage. These resources should be clearly visible and prominently displayed on the IRS webpage.
3) Finally, we ask that the IRS communicate expanded section 127 benefits and new resources to employers and employees, including, but not limited to, transmitting this information through IRS e-newsletters for business owners.
We are hopeful that by providing additional resources and informing employers and employees of section 127 benefits, we will address our shared goals of promoting workforce development, improving worker recruitment and retention, and providing much-needed student loan debt relief.
We appreciate your attention to this matter and look forward to your prompt response.
Under Questioning from Warner, IRS Commissioner Commits to Doubling Processing For Business Tax Credits
Apr 19 2023
WASHINGTON – U.S. Sen. Mark R. Warner (D-VA) today pushed IRS Commissioner Danny Werfel to accelerate processing the backlog of Employee Retention Tax Credit (ERTC) claims. Commissioner Werfel asserted that the IRS is currently processing 20,000 ERTC claims per week, but after further questioning by Sen. Warner, committed to doubling the rate to 40,000 per week, with priority on the oldest claims.
The ERTC was created in response to COVID-19 to incentivize employers to keep their employees on payroll and off unemployment during the height of the pandemic. Virginia small businesses kept those promises to retain their workforce, but years later, due to IRS processing delays, many are still waiting to receive the tax credits they are due.
Sen. Warner has repeatedly raised this issue with the IRS, and today in a hearing of the Senate Finance Committee, he pressed Commissioner Werfel to commit to doubling the rate at which these credits are processed:
Sen Warner asked, “I want to drill down on two issues… The first is, and this was the call we had in late March, the Employee Retention Tax Credit (ERTC). And one of the things we put in place during COVID, again, a bipartisan piece of legislation, which I think was well intended to make sure that employers kept people on during COVID rather than having to put them on unemployment. As I shared with you, you know, there are a number of businesses in Virginia, and I imagine this is probably the case in other states as well, where there's been a backlog. They can't get clarity. They're not getting these tax credits, which I think they did deserve. And since these are businesses that did, from a policy standpoint, what I think we all thought was the right thing by keeping folks employed during that period. Can you update us on the overall ERTC backlog and where we stand?”
Commissioner Werfel explained the factors that make processing ERTC claims difficult, then said, “The action is that now that filing season has ended, we now expect less of calls coming in, as most people have filed their taxes. And we can redeploy people off the phones and reset them so that we're managing paper. Now, prior to this move of moving people off the phones, we were resolving about 20,000 of these Employee Retention Credits a week and using overtime and any downtime where the phones aren't up, moving people to do it. Like every resource, it's an all-hands-on-deck situation post this filing season. Now that we can reset the staff, I think we can maybe double per week the amount of refund of credits that we're processing. So that's the action that we're taking. And in particular, I want to make sure and I've talked to the team about making sure that we go with the older ones first, like those that have been waiting the longest. So, you know, really focus on if it was received in 2022 or prior because they're still coming in, and under the law they can come in until 2025. So this is a filing that we're going to be dealing with for years, but I think we're going to make progress.”
Sen. Warner said, “That was a great answer, and I also took away the fact that you're going to double per week… How much of the backlog is being taken care of on a weekly basis at this point?”
Commissioner Werfel answered, “20,000 a week.”
Sen. Warner reinforced the answer and asked, “So we can look at 40,000 a week.”
Commissioner Werfel responded, “That's the hope.”
Sen. Warner, “You just said it on the record, so I'm going to be back to you!”
Separately, Sen. Warner also pushed Commissioner Werfel in today’s hearing to maximize awareness of the tax benefit created by his bipartisan Employer Participation in Repayment Act, which allows employers to contribute $5,250 tax-free towards their employees’ student loans. The credit has been extended until 2025 and is currently available to help employers retain talent while borrowers pay down their debt.
While questioning Commissioner Werfel, Sen. Warner said, “You know, Section 127 of the code has something that has again been bipartisan, supported for years, which basically, as you're aware, allows an employer to go ahead and send an employee back to school to get additional education. And that additional education up to $5,250 a year goes tax-free to the employee, great retention tool, great ability to get additional skills. One of the things and my friend John Thune and I put a bill in that got broad bipartisan support… that said… shouldn't we also allow those employees who have student debt to go ahead and qualify as well and… pay down that $5,250 a year, tax-free. We had it put in place for a year. It got extended through 2025. It seems like such a no brainer. The take up rate has been not great. What can we do to help further promote? And this is an area where, regardless how we feel about student debt, you know, everybody's kind of all in, and it’s a great retention tool.”
Sen. Warner has consistently pushed for faster processing of outstanding ERTC claims, including during a direct call to Commissioner Werfel in March, and has supported legislation to expand the program. He has also been a tireless advocate to improve IRS customer service and accelerate return times. Sen. Warner strongly supported the Inflation Reduction Act — legislation which provides funding to modernize IRS systems and improve customer service when paying taxes. This will help ensure the IRS has the resources it needs to process tax returns quickly, get rebates to taxpayers faster, and address challenges Virginians have when filing taxes. These investments have improved IRS response rates this tax season from answering two out of every 10 calls to answering nine out of every 10 calls.
Additionally, Sen. Warner has been pressing the IRS to address pandemic-related processing delays for several years. Sen. Warner first raised concerns over backlogs at the IRS in February 2021, as millions of Americans waited for delayed stimulus payments and processing of their tax returns. In January 2022, as the tax filing season opened, Sen. Warner again called on Treasury Secretary Janet Yellen and then-Commissioner Rettig to quickly address reports of unprocessed tax returns for the 2020 filing season. Later that month, Sen. Warner called on the IRS to provide relief for taxpayers amidst the backlog – a request he again reiterated in a bipartisan and bicameral March letter.
WASHINGTON – U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) joined a bipartisan group of House and Senate members in a letter to Internal Revenue Service (IRS) Commissioner Charles Rettig reiterating concerns regarding persistent customer services issues within the agency, and urging the IRS to eliminate the ongoing processing delays, improve customer service, extend the suspension of automated notices and collections, and continue making maximum use of overtime and surge teams.
“Since last year, numerous Members of Congress in the House and Senate have sent several letters regarding customer service issues, processing delays, and the outstanding backlog of returns,” wrote the bicameral group of lawmakers to IRS Commissioner Charles Rettig. “Yet, we are writing again to urge the IRS to extend the suspension of automated collections, continue the pause on automated notices, keep its surge teams in place until hiring challenges and processing backlogs are adequately addressed.”
The lawmakers continued, “[W]e believe that the IRS must take additional steps to improve customer service issues, decrease processing delays, and work-down the backlog of paper returns and correspondence by continuing the maximum use of overtime and surge teams, as well as the continued suspension of automated notices and collections—which have been critical in reducing pandemic-related tax return and correspondence backlogs.”
The letter came just before the signing of the Inflation Reduction Act — legislation Sens. Warner and Kaine helped pass in the Senate—which provides funding to modernize IRS systems and improve customer service when paying taxes. This will help ensure the IRS has the resources it needs to process tax returns quickly, get rebates to taxpayers faster, and address challenges Americans have when filing taxes.
Sen. Warner has been pressing the IRS to address pandemic-related processing delays for the last two years. Sen. Warner first raised concerns over backlogs at the IRS in February 2021, as millions of Americans waited for delayed stimulus payments and processing of their tax returns. In January 2022, as the tax filing season opened, Sen. Warner again called on Treasury Secretary Janet Yellen and Commissioner Rettig to quickly address reports of unprocessed tax returns for the 2020 filing season. Later that month, Sens. Warner and Kaine called on the IRS to provide relief for taxpayers amidst the backlog – a request they again reiterated in a bipartisan and bicameral March letter.
In April of this year Sen. Warner questioned Commissioner Rettig during a Senate Finance Committee hearing about IRS-backlog related issues regarding Economic Injury Disaster Loans. Additionally, in a separate hearing of the Committee, Sen. Warner questioned IRS National Taxpayer Advocate Erin M. Collins about the backlogs and about the measures being taken to address the situation, and joined colleagues in another letter to Commissioner Rettig urging immediate action to reduce backlogs and improve customer service during the 2022 filing season.
A copy of the letter is available here and below.
Dear Commissioner Rettig:
Thank you for your continued work to eliminate the unprecedented backlog at the Internal Revenue Service (IRS). Since last year, numerous Members of Congress in the House and Senate have sent several letters regarding customer service issues, processing delays, and the outstanding backlog of returns. Several Members of Congress have urged you to provide penalty relief for taxpayers, have continually pressed the agency to pursue maximum overtime options for staff who are working on the backlog and on surge teams, and have asked the agency to deploy additional surge teams and other resources in an effective manner to reduce the backlog. Yet, we are writing again to urge the IRS to extend the suspension of automated collections, continue the pause on automated notices, keep its surge teams in place until hiring challenges and processing backlogs are adequately addressed.
In a Senate Finance Committee Hearing on April 7, 2022, you estimated that the IRS would return to a “healthy state” by the end of 2022 and that the IRS expected to hire 10,000 customer service representatives between this year and next year. Yet, according to the National Taxpayer Advocate (NTA), the paper return backlog has actually increased by 1.3 million from the same point as last year and that the IRS was only able to meet 12 percent of its hiring goals for processing center employees earlier this year. NTA also noted that the IRS has not met its 5,000 employee hiring goal for submission processing positions—falling short by 3,417 employees, and that while historically the IRS has paid refunds from paper returns in four to six weeks, refunds are currently taking six months or longer.
Accordingly, we believe that the IRS must take additional steps to improve customer service issues, decrease processing delays, and work-down the backlog of paper returns and correspondence by continuing the maximum use of overtime and surge teams, as well as the continued suspension of automated notices and collections—which have been critical in reducing pandemic-related tax return and correspondence backlogs. Additionally, the IRS must improve its recruitment and retention efforts to adequately address the backlog and increase levels of taxpayer service.
In order to gauge the extent of hiring and processing challenges still facing the Agency, we ask that you provide answers to the following questions no later than August 19, 2022:
- How do you plan to keep your promise to eliminate the backlog?
- What is a “healthy level” of unprocessed tax returns? How does this level align with average carryover levels, prior to the pandemic? Please provide the average carryover level over the ten years prior to FY2020, and the current carryover levels.
- How would you quantify a “manageable” carryover level? How does this compare to average carryover levels prior to the pandemic? Please provide a breakdown of average carryover levels for accounts management, submission processing, and returns in suspense.
- By how much do you estimate the carryover level will increase following the October 15, 2022 extension filing deadline?
- Do you believe your answers to questions 2-4 call your end-of-year estimate for a “healthy” IRS into question?
- For this filing season, what is the average refund delivery period? For comparison, please provide the average refund delivery period over the past ten years including the COVID-19 pandemic and excluding the COVID-19 pandemic.
- How long will the surge teams continue? Will they continue through the end of the fiscal or calendar year, or beyond?
- What effect does the use of surge teams to process the backlog have on the IRS’ other activities, particularly answering phones?
- What steps is the Agency taking to speed up its processing of tax returns? Please specifically note whether the agency prioritizes the processing of returns with refunds.
- What is the status of IRS efforts to implement scanning technology, as recommended by the NTA?
- How many contractors is the IRS currently utilizing? How do contractors factor into the IRS’ stated hiring goals for submission processing and accounts management positions?
We appreciate your consideration of these requests and attention to these issues.
WASHINGTON – With millions of Americans struggling to get answers from the Internal Revenue Service (IRS), U.S. Sen. Mark R. Warner (D-VA) today continued his push to reduce delays and ensure that Virginians are able to get through the 2022 filing season as smoothly as possible.
In a joint letter to IRS Commissioner Charles Rettig, Sen. Warner and a number of his Senate colleagues today urged the IRS to take immediate action to reduce its massive backlog and improve its customer service during the 2022 tax filing season. Specifically, the lawmakers called on the IRS to consider pursuing maximum overtime options for its staff, expanding its surge teams to address processing and correspondence delays, and seeking fast ways to train additional employees and volunteers.
“As the IRS works to eliminate the current backlog of returns and correspondence, we request you to pursue additional actions to maximize the IRS’ current workforce to address the backlog in order to reduce disruptions this filing season,” wrote the lawmakers to IRS Commissioner Rettig.
“We continue to hear from constituents who are still waiting for their 2020 tax returns, have received confusing notices about overdue payments they already paid, and cannot reach anyone at the IRS for assistance. Many of these problems stem from the millions of unprocessed correspondence items from 2021,” the lawmakers added. “We understand the long-term solution to ensure the IRS can manage its workload and provide timely and high-quality service to taxpayers is additional resources to hire and train employees across several departments and modernize technologies. However, those investments will take time, and taxpayers require more immediate relief, especially with the 2022 filing season already underway.”
Additionally, in a Senate Finance Committee hearing today, Sen. Warner questioned IRS National Taxpayer Advocate Erin M. Collins about the IRS backlogs and about the measures being taken to address the situation.
Specifically, Sen. Warner touched on the possibility of extending the tax filing deadline, asking whether an extension would be beneficial in light of the ongoing backlogs. He also asked whether the IRS is setting appropriate expectations and whether the IRS can and should do more right now to better communicate issues to taxpayers.
Apr 29 2021
WASHINGTON – Today, U.S. Sen. Mark R. Warner (D-VA) participated in a virtual Senate Finance Committee
As part of his opening remarks, Sen. Warner highlighted the struggles of one Virginia mom, who reached out to the Senator’s office because she needed to request a copy of her son’s social security card in order to file her taxes, but was unable to do so, due to the severe limitations on in-person appointments.
“I'm getting inundated with constituents who’ve got really heartbreaking stories. I had a constituent named Marie, who had a young son – literally a one-year-old son – who had his social security number stolen. She didn't know his social security number… so she was told she had to send in all this paperwork, including the original copy of her driver's license, which is just baffling to me, because if she knew that if she sent her driver's license in and she had to still drive to work… she was going to get fined,” said Sen. Warner. “When she finally got a response, she was told, ‘well, you can file an extension on your taxes.’ This is causing some real consternation and I really do hope you will be working within OMB restrictions to get more of these in-person appointments scheduled.”
In the hearing, Sen. Warner acknowledged the restrictions placed on SSA by an Office of Management and Budget (OMB) guidance that can limit
Sen. Warner concluded his remarks by emphasizing that SSA must conduct outreach to vulnerable populations to ensure they are made aware of the benefits they qualify for – especially given the past year’s steep decline in applications for Supplemental Security Income benefits.