Health Care Reform Bills: What do they mean for you?
The Patient Protection and Affordability Act was passed on March 21, 2010 and the Health Care and Education Affordability Reconciliation Act of 2010 will have its final vote this week. So what does all this mean for you?
Individuals
Here are some important points that will be affecting individuals:
o All individuals will be required to have "minimum essential" health insurance starting in 2014. People who fail to obtain this coverage will pay a penalty. Those who fall below the income tax filing threshold will be exempt.
o Health insurance companies will not be able to deny coverage because of pre-existing conditions, nor will they be able to raise the premiums because of health problems or charge women more for coverage.
o In years after 2012 there will be a new $2,500 limit on tax-free contributions to health care flexible spending accounts. You will also not be allowed to use FSA funds to purchase non-prescription medications.
o In 2013 the threshold for claiming deductions for medical expenses will increase to 10% of a taxpayer’s adjusted gross income for taxpayers age 65 and older.
o Also beginning in 2013, individuals will be subject to a new 3.8% tax upon either net investment income (including capital gains, interest, dividends, royalties, income from passive activities and rental income) or modified adjusted gross income over $200,000 ($250,000 for joint filers), whichever is the lesser of the two.
Businesses
Here are some important points that will be affecting businesses:
o Large employers (more than 50 employees) who don't provide health care coverage will be fined $2,000 per employee. However, there is a stipulation that the first 30 employees will be subtracted from the penalty calculation.
o Starting in 2011, small business with 25 or fewer employees with average annual wages of less than $50,000 will be eligible for a tax credit of up to 35% if they purchase coverage for their employees. For employers with fewer than 10 employees and average wages of less than $20,000 a 100% credit will be available.
o In 2014, small business employers who purchase coverage through the newly formed Insurance Exchange would be eligible for a tax credit for two years, of up to 50% of their contribution.
o Beginning in 2018, there will be a 40% excise tax on high dollar health insurance plans.
There is a lot more to the new legislation that is bringing the most comprehensive changes to the nation's health care laws in over 40 years. For more information you can go to the following websites:
http://docs.house.gov/rules/health/111_ahcaa.pdf - Has the entire bill in PDF format for you to read through.
http://www.healthreform.gov - Has highlights of how the legislation may affect you as well as coverage from the entire health care reform movement.
