The Health Care Act - A Broad Overview

As we all know, a comprehensive piece of health care legislation became law this spring and is now going into effect. The Patient Protection & Affordable Care Act and the Health Care and Education Reconciliation Act (jointly, the “Act”), contain an array of provisions affecting individuals, employers, and insurance and other medical industry providers so dizzying that you may find yourself in need of medical attention should you attempt to read it. You’ve probably already run across a great deal of information about it in the news and elsewhere. If you’re like most of our clients, some of that information is helpful and accurate, and some of it less so! It’s our goal to point out, in the most general way, the areas most likely to affect you, and to provide a simple resource you can turn to if you hear something about the Act, and you don’t know whether it’s true.

The changes legislated by the Act fall in four general areas:

• Health insurance coverage mandates: new requirements that individuals must have comprehensive health insurance coverage, and that large employers must provide affordable coverage to employees. Find out more about the Health Insurance Coverage Mandates.

• Tax credits, insurance exchanges, and other provisions intended to make it possible for small employers and lower-income individuals to provide or obtain health insurance. Find out about the Small Employer Tax Credit.

• Revenue raisers to pay for the federal assistance to small employers and lower-income individuals: various new taxes, tax increases, deduction limitations, surcharges and reporting requirements. Many of the taxes relate to health care, but not all of them do. We explain the tax increases affecting individuals.

• Health insurance reforms: new rules governing the benefits plans must contain, how the plans or coverage under the plan can be priced, and how broadly plans must be offered. We are not addressing these changes in detail, but they are summarized in our Provisions & Effective Dates table.

The provisions of the Act phase in over many years – some have already gone into effect, others won’t until 2014. For an overview of the timeline, and very brief descriptions of many of the provisions, you can use the Table of Provision & Effective Dates.

This bulletin is a summary and is not intended as tax or legal advice. You should consult with your tax advisor to obtain specific advice with respect to your fact pattern.

Based on the most recent "best practice" standards for tax advisors issued by the Treasury Department, commonly referred to as Circular 230, we wish to advise you that this bulletin has not been prepared to be used, and cannot be used, to provide assurance that penalties which may be assessed by the IRS or other taxing authority (including specifically section 6662 understatement penalties) will not be upheld.