Posts Tagged ‘Health Care Reform’
Please join us on May 2, 2013 at Greenwalt CPAs Education Center for a 2 hour seminar which will address the actions that your organization needs to take in 2013, and what you need to be aware of going forward. The rules,
costs, and options associated with the Health Care Reform act are complicated and are not well understood. Wanza Schweiger, CEBS & Managing Partner of Benefit Innovations, LLP and Marie Jett, CPA, Senior Manager in our Tax Services Group will discuss the following topics:
· What must I be aware of now and going forward?
· What needs to happen by July 31, 2013?
· What will the costs be —
- Of health insurance?
- In additional taxes?
- For self-insured plans?
· How will Health Care reform affect the future of group health insurance plans?
· What are my options to best position my organization —
- To be able to minimize the cost to the organization
- To minimize the cost to our employees.
WHO SHOULD ATTEND?
· Personnel who handle employee benefit matters for their organization
· Owners/managers who are responsible for overseeing and approving critical organization decisions.
· Those who are concerned about the future of health care and where it is headed.
Our doors will open at 8:00 am on May 2 for coffee and light refreshments. The session will begin at 8:30 and we plan to be finished by 10:30 am.
To register, please click here.
or call Suzanne Haskamp at 317.260.4476. When you register, you will have an opportunity to list some of the key questions you would like to have addressed.
by Marie Jett, CPA | Manager, Tax Services Group and Member of the Manufacturing & Distribution Services Group
In the last e-newsletter issue, we looked at the Health Care Bill and its affect on businesses. This time we are discussing the affect this legislation has on individuals and the many tax law changes this bill has brought about. Specifically we discuss the requirement that individuals have health insurance or face a penalty, tax credits to individuals, the increase in Medicare tax to wages, and the additional Medicare tax on investment income.
by Marie Jett, CPA | Manager, Tax Services Group and Member of the Manufacturing & Distribution Services Group
The recently enacted health care legislation bill requires applicable large employers (50 or more employees) to offer and contribute to their workers’ health insurance or pay a penalty. Small employers who offer health coverage may be able to receive a tax credit. Under the new law, effective for months beginning after Dec. 31, 2013, a large employer that 1) does not offer coverage for all its full-time employees, 2) offers minimum essential coverage that is unaffordable, or 3) offers minimum essential coverage that consists of a plan under which the plan’s share of the total allowed cost of benefits is less than 60%, is required to pay a penalty if any full-time employee is certified to the employer as having purchased health insurance through a state exchange with respect to which a tax credit or cost-sharing reduction is allowed or paid to the employee.
Representing a sweeping overhaul of the U.S. health care system, the Patient Protection and Affordable Care Act was signed into law on March 23, and its companion reconciliation act was signed into law last week. Here’s a brief summary of the main tax provisions affecting individuals and businesses.
Individual tax provisions
Important tax provisions affecting individuals include:
Penalties for the uninsured. Beginning in 2014, most individuals who aren’t eligible for Medicaid, Medicare or other government-provided coverage will have to purchase minimum essential health coverage. Those who fail to do so will be hit with a penalty (with exceptions for the poor and certain others).
Premium assistance for those with lower incomes. Beginning in 2014, people with income between 133% and 400% of the federal poverty level (FPL) are eligible for tax credits or cost-sharing subsidies on a sliding scale to help pay insurance premiums.
Higher taxes on the affluent. To help offset the act’s cost, affluent taxpayers will face higher taxes. Beginning in 2013, taxpayers with more than $200,000 in earned income ($250,000 for families) will pay an additional 0.9% Medicare tax on the excess. In addition, those with an adjusted gross income (AGI) over $200,000 ($250,000 for joint filers) will pay a new, 3.8% Medicare tax on unearned income, such as interest, dividends, rents, royalties and certain capital gains. The tax doesn’t apply to retirement plan distributions.
Also starting in 2013, the act raises the threshold for deducting unreimbursed medical expenses from 7.5% to 10% of AGI and limits contributions to flexible spending accounts for medical expenses.
Business tax provisions
Key tax provisions affecting businesses include:
Penalties for failure to provide coverage. The Patient Protection act doesn’t require employers to provide insurance coverage, but starting in 2014 it imposes tax penalties on certain employers that don’t provide it. Employers with 50 or more full-time-equivalent workers (FTEs) that don’t offer coverage and have at least one full-time employee who receives a premium tax credit are subject to an annual fee of $2,000 per FTE (not including the first 30 FTEs).
Tax credits for small businesses. Starting this year, small businesses are entitled to tax credits for purchasing group health coverage. For tax years 2010 to 2013, the maximum credit is 35%, provided the employer contributes at least 50% of the total premium or 50% of a benchmark premium. Starting in 2014, a maximum credit of 50% is available for two years for employers that purchase coverage through a state exchange and contribute at least 50% of the total premium. Smaller credits are available for tax-exempt businesses.
Excise tax on “Cadillac” plans. Starting in 2018, high-cost group plans will be subject to a 40% nonrefundable excise tax. The tax applies to annual premiums in excess of $10,200 for individual coverage and $27,500 for family coverage (excluding stand-alone dental and vision plans). The thresholds are higher ($11,850 and $30,950, respectively) for retirees and employees in certain high-risk professions. These amounts will be indexed for inflation.
An all-encompassing act
The tax provisions of the Patient Protection act will have an impact on most taxpayers, as well as on how employers deal with health care insurance for their employees. Please contact us if you have questions about how the provisions may affect you or your business.