The Health Care Act contains many other provisions, and even the rules we have outlined here involve much more than we’ve been able to include. Please let us know if you have any questions about these upcoming changes. Chris Loughran (503)221-7565 Tim Kalberg (503)221-7511 David Uslan (503)221-7597 Roy Abramowitz (503)221-7500 Keith Meyers (503)221-7579 Eric Hormel (503)221-7585 Brigitte Sutherland (503)802-8613 Kimberly Woodside (503)221-7592 Susan Sterne (503)221-7531
The Health Care Act contains many other provisions, and even the rules we have outlined here involve much more than we’ve been able to include. Please let us know if you have any questions about these changes.
Partial Summary of Provisions & Effective Dates
| March 30, 2010 | Economic substance doctrine codified, theoretically reducing court-by-court variation in how this doctrine is applied, and providing for penalties if transactions lack economic substance. |
| July 2010 (90 days) | National high-risk insurance pool established to provide health insurance plans for those who cannot obtain insurance in general insurance markets. Indoor tanning services subject to 10% excise tax. |
| September 2010 (6 months) | Health insurance reforms: children cannot be denied coverage due to pre-existing conditions; children under age 27 can stay on their parent’s health insurance plan; annual plan benefit limits are subject to restrictions; insurance plans cannot impose a lifetime benefits maximum; insurance plans cannot require a co-pay or apply deductibles to preventive care or immunizations; insurance coverage cannot be rescinded if you become sick. Seniors eligible for $250 rebate to cover the Medicare Part D (prescription drug) “donut hole.” |
| 2010 | Tax credit available for small employers who pay for 50% or more of their employee’s health coverage. |
| 2011 | Penalty tax on withdrawals from HSA or Archer MSA not used for medical expenses increases to 20% from 10%. HSA, FSA and Archer MSA funds cannot be used for over-the-counter medications except insulin, unless prescribed by a physician. 2011 W-2s must disclose value of health benefits provided to the employee by the employer (not taxed – just disclosed). Pharmaceutical industry pays a flat fee assessed across the sector. |
| 2012 | 1099 reporting requirements modified – businesses must now issue 1099s to incorporated vendors as well as unincorporated vendors. |
| 2013 | Annual contribution to an FSA limited to $2,500. Itemized deductions for medical expenses only allowable to the extent they exceed 10% (rather than 7.5%) of adjusted gross income. Additional 0.9% Medicare tax imposed on wages over $200,000 / $250,000. 3.8% Medicare tax imposed on net investment income if income exceeds $200,000 / $250,000 (lesser of net investment income, or income over threshold is subject to additional tax). 2.3% medical device tax imposed. Does not apply to sales of eyeglasses, contact lenses or hearing aids. |
| 2014 | Health insurance reforms: no annual coverage limits; plans must offer a minimum benefits package (catastrophic coverage only is allowable but only for insureds under age 30); no denial of coverage for pre-existing conditions, medical history, genetics; premium cost can vary for tobacco use, but not for much else and definitely not for gender or medical history; no waiting periods greater than 90 days. Individual coverage mandate in effect. Employer coverage mandate in effect for employers with >50 employees. Insurance exchanges in effect. Health coverage credits and other assistance available to individuals earning 400% of federal poverty line or less. Health insurance providers subject to industry-wide flat fee. |
| 2018 | Excise tax of 40% imposed on the excess benefit of high-cost employer-sponsored health coverage (tax on “Cadillac” insurance plans). |
This table 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.