Here are some updates regarding the health care reform legislation. However, there are still opponents fighting the law and with the November election, this law could be completely scrapped. None of these updates are set in stone.
- For high-income earners ($200,000, $250,000 joint), there will be a Medicare payroll tax increase of 0.9%.
- For high-income earners, there will be an additional 3.8% tax on their net investment income.
- There will be an elimination of the employer deduction for Medicare Part D subsidy.
- Flexible Spending Accounts will be limited to $2500 max.
- There will be a medical expense deduction to 10%.
- On the majority of plans that small businesses will purchase, there will be an $8 billion tax. It does not apply to self-insured plans.
- Premium credits will begin and the government will begin subsidizing individuals up to 400% of the poverty line.
- Individuals without government approved insurance will pay a tax.
- Employers will be required to provide coverage for 50 or more full-time employees. Employers will be subjected to penalties in the following scenarios:
- If more than 50 full-time employees and the company does not offer insurance, with one or more employees receiving premium subsidies. Penalty: $2,000/full-time employee (not including the first 30 employees).
- If more than 50 full-time employees and the company offers insurance with one or more employees receiving premium subsidies. Penalty: The lesser of $3,000/subsidized employee or $2,000/full-time employee (minus the first 30 employees).
- If more than 50 full-time employees and the company offers insurance, with no employees receiving premium subsidies there is no penalty on employer. All non-grandfathered and Exchange health plans are required to meet federally mandated levels of coverage.
- If 50 or fewer full-time employees: No penalty or requirement to offer insurance. Those who qualify for the employer tax credit must purchase a plan from the exchange
- New counting requirements for part-time employees: Part-time employees’ hours will be converted into full-time equivalents for calculations of compliance and determination of penalties. For example, if six employees each work five hours per week, they will count as if the firm had one additional full- time employee.
- State based health exchanges must be available to provide a choice for employers and individuals.
- The insurance reforms will go into effect. Insurers cannot deny an individual coverage due to pre-existing conditions. Limits are applied to out-of-pocket cost-sharing and all insurance plans must government defined coverage information. Modified community rating standards will also go into effect for both individual and family coverage.