(source: newsletter from SmarTax and Accounting)
“While not all encompassing, here are some of the major items within the newly passed Health Care legislation. More news will be forthcoming, as well as possible legal challenges to parts of the bill, so you may want to stay tuned.
- Pre-existing Health Problems. Starting in 2010 insurers may not deny coverage to eligible individuals (including children) because of a pre-existing health problem. In addition, lifetime limits and restrictive annual limits on benefits have been prohibited from most plans.
- Children on Adult’s Policies. Adult children under the age of 26 may remain on a parent’s health insurance policy.
- Government Insurance Help. Families with incomes up to $88,000 may receive government help to pay for health insurance.
- You Must Have Health Insurance. Beginning in 2014, all Americans will be required to obtain health insurance or they will be penalized via an excise tax. The tax amount is subject to change, but the current proposal is to tax each uninsured individual $750 per year plus 50% of that amount for each child not covered. There will be a maximum tax per family. Most employers are also required to provide affordable health insurance to employees or face penalties as well.
- Higher Medicare Tax. To pay for the bill, the Medicare payroll tax is being increased 0.9% to 2.35% on wages above $200,000 for individuals and above $250,000 for those married filing jointly starting in 2013.
- Increase in Those Covered by Medicaid. Households with incomes up to 133% of the federal poverty level (about $29,327 for a family of four) will now be eligible for Medicaid benefits.
- State-run Insurance Exchanges. A new state-run insurance exchange will be created to help unemployed or newly self-employed individuals afford health insurance.
- Tax on High-Cost Policies. Starting in 2018, health care plans with a premium cost of $10,200 or more for singles and over $27,500 for families could face a 40% tax on the excess amounts. These amounts are pegged to inflation and will be billed to the insurance company writing the policy.
- New Interest, Dividend and Capital Gain Tax. Starting in 2013 a new 3.8% tax will be imposed on dividends, interest and capital gains for all individuals making more than $200,000 ($250,000 for married filing jointly).
- Medical Itemized Deduction Threshold Increases. Beginning in 2013 you will need medical expenses in excess of 10% (formerly 7.5%) of your income prior to using the expenses as an itemized deduction. There is an exception for those over 65 years old who may still use the 7.5% threshold.
As stated earlier, more details are to follow, and rest assured changes in America’s health care system are just beginning as everyone adjusts to this new legislation.”