Editor’s Note: There have been substantial changes in the ACA law since we published this post. See our current newsletter for updated information.

The Cliff Notes version
(detailed explanation below)

2010 – 2011

• Small business tax credit
• Adult dependent insurance coverage
• Return information disclosure Restrictions on use of HSA and FSA funds

2012

• Information reporting on W-2 (deferred to 2013) 2013
• Fees on health plans

2013

• Additional hospital insurance tax on high-income taxpayers
• Medical care itemized deduction threshold increased
• Flexible spending account limit decreased
• Additional Medicare tax on investment income

2014 & Beyond

• Premium Assistance Credit
• Reporting requirements
• Excise tax on high-cost employer plans

Retroactive provisions

Exclusion for assistance provided to participants in State student loan repayment programs for certain health professionals (retroactive to January 1, 2009)

Qualifying therapeutic discovery project credit (retroactive to January 1, 2009) – provision expires at end of 2010

Modification of section 833 treatment of certain health organizations (retroactive to January 1, 2010)

Make the adoption credit refundable; increase qualifying expenses threshold, and extend the adoption credit through 2011 (retroactive to January 1, 2010)

Small Business Tax Credit for certain small businesses (those meeting certain criteria) providing health insurance to employees (retroactive to January 1, 2010). In 2013, restricted only to insurance purchased through an exchange and only available for two consecutive years.

(For a humorous but accurate explanation of just how this credit works click here )

 

Provisions going into effect on the date bill is signed into law (3/23/10).

Additional requirements for section 501(c)(3) hospitals

Study and report of effect on veterans’ health care

Provide income exclusion for specified Indian tribe health benefits

Codify economic substance doctrine and impose penalties for underpayments 

Provision specifying that subsidies or tax credits received through health care reform will not affect individual’s qualifications for other federal programs

Tax Exemption for Certain Member-Run Health Insurance Issuers

Tax Exemption for Entities Established Pursuant to Transitional Reinsurance Program for Individual Market in Each State

Rules pertaining to how the IRS is involved in income-verification and individual status for the purposes of participation in the exchanges and subsidies received

Other provisions going into effect before the end of 2010

July 1, 2010: Impose 10% excise tax on indoor tanning services

Provisions going into effect in 2011

Employer W-2 reporting of value of health benefits

Conform the definition of medical expenses for health savings accounts, Archer MSAs, health flexible spending arrangements, and health reimbursement arrangements to the definition of the itemized deduction for medical expenses (excluding over-the-counter medicines prescribed by a physician)

Increase in additional tax on distributions from HSAs and Archer MSAs not used for qualified medical expenses to 20%

Impose annual fee on manufacturers and importers of branded drugs ($2.5 billion for 2011, $2.8 billion per year for 2012 and 2013, $3.0 billion per year for 2014 through 2016, $4.0 billion for 2017, $4.1 billion for 2018, and $2.8 billion for 2019 and thereafter)

Provisions going into effect in 2012

Simple cafeteria plan nondiscrimination safe harbor for certain small employers

Require information reporting on payments to corporations

Provisions going into effect in 2013

$500,000 deduction limitation on taxable year remuneration to officers, employees, directors, and service providers of covered health insurance providers (goes into effect in 2013, but applies to compensation for services performed from January 1, 2010 forward)

Limit health flexible spending arrangements in cafeteria plans to $2,500; indexed to CPI-U after 2013

Impose 2.3% excise tax on manufacturers and importers of certain medical devices

Eliminate deduction for expenses allocable to Medicare Part D subsidy

Raise 7.5% AGI floor on medical expenses deduction to 10%; AGI floor for individuals age 65 and older (and their spouses) remains at 7.5% through 2016

Broaden Medicare Hospital Insurance Tax Base for High-Income Taxpayers – additional HI tax of 0.9% on earned income in excess of $200,000/$250,000 (unindexed), and Unearned Income Medicare Contribution on 3.8% on investment income for taxpayers with AGI in excess of $200,000/$250,000 (unindexed)

Impose Fee on Insured and Self-Insured Health Plans; Patient-Centered Outcomes Research Trust Fund (expires after 2019)

Provisions going into effect in 2014

Increase by 15.75 percentage points the required corporate estimated tax payments factor for corporations with assets of at least $1 billion for payments due in July, August, and September 2014

Impose annual fee on health insurance providers ($8 billion in 2014, $11.3 billion in 2015 and 2016, $13.9 billion in 2017, $14.3 billion in 2018, and indexed to medical cost growth thereafter); based upon firm’s market share starting in 2013

Excise Tax (i.e., penalty) on Individuals Without Essential Health Benefits Coverage

Excise Tax (i.e., penalty) on Employers Not Providing Health Insurance Coverage to Employees (Shared Responsibility for Employers)

Refundable Tax Credit Providing Premium Assistance for Coverage Under a Qualified Health Plan

Requirement that employers report health insurance coverage

Provisions specifying cafeteria treatment of employers who purchase insurance through exchange

Provisions going into effect in 2018

40% excise tax on health coverage in excess of $10,200/$27,500 (subject to adjustment for unexpected increase in medical costs prior to effective date) and increased thresholds of $1,650/$3,450 for over age 55 retirees or certain high-risk professions, both indexed for inflation by CPI-U plus 1%; adjustment based on age and gender profile of employees; vision and dental excluded from excise tax; levied at insurer level; employer aggregates and issues information return for insurers indicating amount subject to the excise tax; nondeductible

 

 

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