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ObamaCare and You: Changes for 2014 and Beyond

Most of the healthcare reform rollout will be completed in 2014. In this final blog of the series, let’s look at a few of the highlights that may impact you, your family and business as the final parts of the law are enacted.

1.     Individual Mandate

All individuals who do not obtain adequate healthcare coverage by 2014 will be taxed.

  • The tax will be phased in over three years.
    • In 2014: tax amount will equal whichever is greater, 1% of income or $95.
    • By 2016: equal to whichever is higher, 2.5% of gross income or $695.

2.     Tax Credit For Low-Income Medical Care Purchasers

Starting in 2014, a refundable tax credit will be provided on a sliding scale based on household income, between 100% and 400% of the federal poverty level (approximately $11,000 to $44,000 for individuals and $22,000 to $88,000 for families) for purchasers of medical care coverage.

3.     Health Insurance Exchange

In 2014, each state will have a government-regulated exchange offering different levels of health insurance coverage at different prices.

  • Plans can be purchased by individuals, the self-employed and small businesses.
  • Small firms can receive credit of up to 50% of their costs by signing up with one of the exchanges.
  • The credit will phase out based on the following (and be gone after 2015):
    • 1-10 workers & average annual wages of $25,000 or less
    • 11-24 workers & wages $25,001-$49,999
    • 25 workers & $50,000 +

4.     Excise Tax on High-Cost Health Plans

  • This tax will begin in 2018.
  • Will be levied on the portion of the plan that exceeds:
    • Individuals: $10,200
    • Families: $27,500

5.     Businesses Charged for Inadequate Coverage

  • Applies for businesses with 50 or more employees.
  • Fee will be nondeductible.
  • Fee will not count the first 30 workers.
  • Calculation of the fee will be remaining number of employees times $2,000.

As always, I am here to help you determine how you can make the most of these changes. Give me a call today!

Missed one of the previous blogs in this series?

ObamaCare and You: 4 Ways the Healthcare Reform May Affect You Now 

ObamaCare and You: Get Ready for 2013

ObamaCare and You: Get Ready for 2013

With each passing year, the ObamaCare reforms get more and more aggressive. Plan ahead for 2013 by taking a look at the following summary of what you can expect.

1.     Medicare Surtax

  • A 0.9% Medicare surtax will apply to those earning the following:
    • Single: $200,000 or more
    • Married: $250,000 or more

 2.     Medicare Tax on Investment Income

  • A 3.8% tax will be applied to the lesser of the following for those in the earning levels listed in #1 above (excluding retirement account income and tax-exempt interest):
    • Unearned income (interest, dividends, capital gains, rents, royalties and annuities)
    • Amount the taxpayer’s adjusted gross income exceeds the amounts listed in #1.

3.     Health Care Flexible Spending Account Limit

  • The amount that employees can contribute will be set at $2,500/year/person.

4.     Itemized Deductions for Medical Expenses

  • The floor will be set at 10%. ( an increase from 7.5%)
  • Taxpayers age 65 and over will not experience this change until 2016.

5.     Medicare Part D Prescription Drug Coverage

  • Employers will no longer be able to take a deduction for providing this coverage to their retirees to the extent the federal government subsidizes the coverage.

Next blog: ObamaCare and You: Changes for 2014 and Beyond

Click here to read about the healthcare reforms that are already in place.

Be sure to share! Help your friends and family prepare for ObamaCare by sharing this article on Facebook or Twitter.

As always, I am here to help you determine how you can make the most of these changes. Give me a call today!

ObamaCare and You: 4 Ways the Healthcare Reform May Affect You Now

ObamaCare. Love it or hate it, the odds are you are not totally clear on how it impacts you and your business. Whatever our opinions are of this major healthcare reform, I know we can all agree: its good to be fully aware of the changes so we can be proactive.

Lets take a look at some of the ways it may already be part of your life.

1.       Small Business Tax Credits

As an incentive to provide coverage, small companies can currently benefit…

  • 1-10 workers & average annual wages of $25,000 or less: Receive a credit of up to 35% of your health premium costs through 2013.
  • 11-24 workers & wages of $25,001-$49,999: credit decreases based on a sliding scale.
  • 25 workers & $50,000 +: No credit.

 2.       Reporting Health Care Benefits

  • Employers are required to report the value of health care benefits provided on their workers’ 2012 W-2s (reporting on the 2011 W-2s was optional). However, the amount reported is not taxable income.

 3.       Special Healthcare Accounts

  • HSA Penalty: Taking a non-qualified distribution from your health savings account now means a doubled penalty of 20%.
  • Over-the-counter medications may not be purchased with funds from flexible spending accounts, health reimbursement agreements or health savings accounts.

4.       Insurance Coverage for Children Under 26

  • Young adults under 26 may be covered under their parent’s plan even if they are married or are financially independent.

The changes up to now have been relatively minor, but they will get more aggressive next year.

Next blog: ObamaCare and Me: Get Ready For 2013

Be sure to share this article on Facebook and Twitter to help your family, friends and business associates know how they can prepare, too! The sharing buttons are below.

As always, I am here to help you determine how you can make the most of these changes. Give me a call today!

Four Different Types of Life Insurance

generic insurance policy with pen; could be life, auto, health etc

Life insurance… We typically think of it as a retiree’s portfolio product. It’s the end-of-life planning that we much rather not think about. However, life insurance is a critical component to financial planning for all ages. Life insurance does pay death taxes, but also provides income for family expenses such as college bills or mortgages. And the benefits (proceeds) of the policy, usually far exceed the cost of the premiums.

 Here are the four most popular types of life insurance:

 1.     Term Insurance-Term insurance is the purest form of life insurance and is typically low cost. It is only valid for a specific time period, such as 10 or 15 years (after which the insurance coverage ends), and provides a fixed amount of protection for a fixed premium.

 2.     Whole Life (Permanent) Insurance-In this version, the premium remains the same during the length of the contract. As a cash value accrues, the insured can borrow against the cash value or can “cash out” that value by canceling the policy.

 3.     Universal Life-This type of policy combines the two previous policy types. Part of the premium is invested in a cash fund while the balance is used to purchase renewable term insurance. This type of policy separately states and defines the investment, expense, and mortality elements and offers greater flexibility for paying premiums. The insured chooses a death benefit that may:

  •  increase with time, or
  • be linked with increasing cash value, or
  • remain the same.

 4.     Variable Life-A variable life is similar to whole life…with one major difference. Both the death benefit and the surrender value are not guarantee because they may vary based on investment performance of policy assets. The benefit is the investment could possibly grow (or not-thus the higher risk).

 Which type of insurance will suit the needs of your and your family? Don’t wait to decide. The younger you are when you purchase, the better your rates. But at any age, options exist to meet your needs. Give me a call to discuss how we can help you with your life insurance decisions.