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2011
• No distributions for over-the-counter drugs.
• Simple cafeteria plans for small employers.
• Penalty increase non qualified HSA and FSA.

2012
• employer health coverage on W-2.



Health Care Reform Impacts Most Businesses and Individuals


The Patient Protection and Affordable Care Act, signed by the President on March 23, 2010, as amended by the Health Care and Education Reconciliation Act of 2010 and signed by the President on March 30, 2010, will implement fundamental health care reforms and require most of the 32 million uninsured individuals to obtain health care coverage or pay penalties. Most lower-income individuals, along with some middle-class families, will receive government help to pay for health insurance purchased at a to-be-established state Exchange. With the exception of small businesses, employers not offering qualifying coverage will be subject to an additional tax.


TAX TIME LINE IN THE HEALTH CARE REFORM ACT
IRC Section Provisions Effective Date
2010
23; 137(a)(2) Adoption credit and employer-provided adoption assistance increased to $13,170 (from $12,170), extended through 2011 and made refundable. after 12-31-09 and before 1-1-2012
38(b)(36) A maximum 35% credit (25% for non-profits) is allowed to small employers paying at least 50% of employees single-person health insurance costs. Credit phases out when average annual employee wage increases from $25,000 to $50,000 or average number of employees increases from 10 to 25. after 12-31-2009
48D 50% credit provided to small business for investments in certain qualifying therapeutic discovery projects (for 2009 and 2010) amounts paid or incurred for tax years after 12-31-2008
105(b);162(l)(1) Income exclusion for employer provided health insurance and for self-employed health insurance extended to children under age 27 after 3-30-10
5000B 10% excise tax on indoor tanning services. after 7-01-10
7701 Economic substance doctrine with substantial penalties. after 3-30-2010
2011
106(f) FSA, HSA, HRA and MSA qualified distributions include withdrawals for prescription drugs and insulin only, no over-the-counter drugs. after 12-31-10
125(j) Establish simple cafeteria plans for small employers. after 12-31-10
220(f)(4)(A) Penalty increased to 20% for non qualified HSA and FSA distributions after 2010. after 12-31-10
2012
6041(a) Information reporting required for payments of $600 or more for property or services to all corporations except the tax exempt. repealed
6051(a)(14) Cost of employer sponsored health coverage to be shown on W-2. after 12-31-11
2013
56(b)(1)(B) (tax year); 213 Medical expense deduction increases to 10% after 2012, after 2017 for people 65 or older. after 12-31-12
125(i)(1) FSA contributions limited to $2,500. after 12-31-12
6041(a) 0.9% Medicare tax increase on SE income and employee wages when AGI exceeds $200,000 ($250,000 combined wages MFJ). after 12-31-12
6051(a)(14) New 3.8% Medicare tax assessed on net investment income of individuals, estate and trusts with AGI over $200,000 single and $250,000 MFJ. after 12-31-12
2014
36B Individuals between 100% and 400% of federal poverty level will qualify for refundable tax credit ("premium assistance credit") to offset exchange-purchased health insurance premiums. after 12-31-13
4980H Employers with at least 50 full time employees may be subject to penalty if not providing health insurance coverage to employees. after 12-31-13
6056 Reporting of large employer health insurance coverage. after 12-31-13
5000A(a) "Shared responsibility penalty" assessed against taxpayers who do not have health coverage. Penalty is phased in over three years starting in 2014 at $95 per individual ($285 per family), in 2015 at $325 per individual ($975 per family) and in 2115 $695 per individual ($2,085 per family). after 12-31-13
2018
4908I(b)(3)(C) 40% excise tax assessed against "Cadillac" employer sponsored health plans where the premium exceeds $10,200 for individual coverage and $27,500 for family coverage. after 12-31-17



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