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?