WASHINGTON—A new health care reform proposal unveiled Monday by the White House would dramatically scale back a proposed tax on costly health insurance plans.

Other provisions in the outline—intended to bridge differences between reform bills previously passed by the House of Representatives and Senate—would ease assessments on employers that do not offer health insurance coverage, while requiring greater state scrutiny of health insurer rate hikes with oversight by federal regulators.

The administration's proposal would require group plans to extend coverage to employees' adult children up to age 26, ban annual and lifetime dollar limits, and require plans to cover “proven” preventive services with no employee cost sharing.

The proposal also would mandate certain reforms in the personal lines markets, such as curbing the use of pre-existing medical condition exclusions.

The core of the administration's proposal is the same as the House and Senate bills: It would provide federal premium subsidies to enable millions of lower-income uninsured individuals to obtain coverage through new state health insurance exchanges. The administration says its proposal would extend coverage to 31 million of the nation's uninsured and make coverage more affordable for many more.

For many employers, the most significant provision in the administration's reform outline—released three days before a televised White House health care reform summit—involves an excise tax on costly health insurance plans.

As part of the reform package passed by the Senate in December, a 40% excise tax would be imposed on health insurance premiums exceeding $8,500 for single coverage and $23,000 for family coverage. The tax would begin in 2013 and the cost threshold would rise in succeeding years to match the annual rise in the Consumer Price Index, plus one percentage point.

The House bill would make no changes in the tax-free status of group coverage.

Under the administration's plan, the excise tax would not kick in until 2018, while the amount of premiums exempt from the tax would be $10,200 for single coverage and $27,500 for family coverage.

However, if health care costs rise unexpectedly quickly between now and 2018, the cost thresholds triggering the tax would be automatically adjusted upwards, though the 11-page outline does not detail how this would be done. After 2018, the cost thresholds, like the Senate bill, would increase each year to match the rise in the index, plus one percentage point.

In addition, the cost threshold would be further eased by providing an actuarial adjustment for employers whose health care costs are higher due to the gender and age of their employees. That change is a response to employer complaints that, under the Senate bill, they would have been hit with the excise tax due to the demographics of their workforce, not because they offered rich health care benefits. The proposal also would exempt dental and vision care costs in calculating health care plan costs.

The administration's proposal also modifies—in some ways stiffening and in other ways easing—an assessment that would be imposed on employers with at least 50 employees that do not offer coverage.

Under the Senate plan, employers with at least 50 employees that do not offer coverage would pay a $750 assessment for each full-time employee. The White House proposal would bump up that assessment to $2,000 for each full-time employee. However, in determining the assessment, an employer's first 30 employees would be excluded from the calculation. Taking the case of an employer with 100 employees that did not offer coverage, for example, its assessment would be 70 times $2,000.

However, responding to heavy lobbying from retailers and other industries with lengthy waiting periods before new employees are eligible for coverage, assessments would not apply for employees who had to wait for up to 90 days before they were eligible for coverage. The Senate-approved reform bill, by contrast, imposes a $600-per-employee assessment for employers with waiting periods between 61 and 90 days.

While not explicitly spelled out, the White House plan is believed to retain a Senate reform provision in which employers would be liable to pay up to $3,000 a year for each employee whose share of the health insurance premium exceeds 9.8% of income and if those individuals receive subsidized coverage through state health insurance exchanges.

The proposal also is believed to retain a provision in the House and Senate bills that would impose a $2,500 annual cap, starting in 2011, on the maximum annual contributions that could be made to health care flexible spending accounts.

The administration's proposal comes as it tries to revive the drive to pass health care reform legislation. That drive stalled last month after Republican Scott Brown won a special election in Massachusetts to fill the Senate seat held by Edward Kennedy before his death last August. The election result ended Democrats' filibuster-proof majority in the Senate and their ability to pass a reform bill without any Republican support.

“This is an effort to move the process forward and address some of the most contentious provisions in an effort to find a middle ground between the House and Senate bills,” said Frank McArdle, a consultant with Hewitt Associates Inc. in Washington.