091813 ppaca slide deck flinchbaugh

An overview of the
administrative and tax
requirements of the Law…
2010…
2011…
2012…
2013…
2014…
2015…
2016…
2017…
2018…
» The Patient Protection and
Affordable Care Act
Joel A. Flinchbaugh, CPA
Member of the Firm
Smith Elliott Kearns & Company, LLC
Jflinchbaugh@sek.com
www.SEK.com
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM

President Obama Signs law
March 23, 2010
now what???

35% tax credit applicable for:
• Businesses with less than 25 FTE employees &
average wages less than $50,000.
• Credit reduced as # of employees exceeds 10 and
average wage exceeds $25K.
Small Business Health Insurance Credits Begin
2010

Tax applicable for services rendered after July 1,
2010.
10% Excise Tax on Indoor Tanning Services
2010

• Over the counter drugs NO LONGER qualify.
• Non-qualified distributions subject to 20%
penalty vs. 10% under old law.
Modifications to qualified expenses from FSA’s,
HSA’s, and HRA’s and increased penalties.
2011

Medical Loss Ratio Limits Begin
• Small group and individual insurers-80%.
• Large group-85%.
• Excess premiums must be refunded.
2011

Reporting of Health Insurance on W-2
• Employers issuing more than 250 W-2’s required
to report health benefits on W-2
• Still waiting for final regulations regarding
companies with less than 250
• Not taxable – just information
2012

Summary of Benefits Required
• Renewals on or after 9/23/12
• Notice of change in benefits must be provided 60
days before change
• Insurance company should be providing this
reporting for employers
2012

Employers Begin to Receive MLR rebates
• Can be used to offset future premiums.
• If employees contribute to premiums, they must
receive proportionate share of rebate.
2012

Increased Medicare Tax (Hospital Insurance Tax)
• .9% of wages in excess of…
• $200,000 if single.
• $250,000 MFJ.
• Employers MUST withhold on wages paid in
excess of $200,000 to individual.
2013

Unearned Income Medicare Contribution Surtax
• 3.8% on lessor of:
• Net investment income or
• Excess of modified AGI over $200/S, $250/MFJ.
• Investment income (interest, dividends, royalties,
rents, sale of passive activity, passive activity).
2013

Increased Threshold for Deducting Medical Expenses
• Threshold raised to 10% of AGI.
• If over 65 - 7.5% limit still applies through
December 31, 2017.
2013

Flexible Spending Account Limits
• Annual limit of $2,500 for contributions to
flexible spending accounts.
• No impact on premium or dependent care.
2013

2.3% Excise Tax on Medical Device Manufacturers
• Exemptions
• Eyeglasses.
• Contacts.
• Any device generally purchased by the public at
retail.
2013

Patient Centered Outcomes Research Institute Fee - PCOR
• Assessed on medical plans – usually paid by
carrier.
• Employer may be subject with any type of self
insurance.
• $1 per covered life, increasing to $2 than indexed
with inflation.
2013

Notice of Coverage- Due 10/1/13
• Employers required to provide
• Must include:
• Description of services offered on Exchange
• Potential eligibility for premium credit
• Info about impact of purchasing through Exchange
2013

Individual Mandate
• Maintain “minimum essential coverage” or:
• 2014 - Penalty (Tax) greater of 1% of household
income OR $95 per uninsured
• 2015 – Penalty (Tax) greater of 2% of household
income or $325 per uninsured
• Penalty Cap of $2,250 per household
• There are some exceptions to the penalty
2014

“Tax Credits” for Individuals Purchasing Through Exchange
• A subsidy for purchasing insurance through the
Exchange.
• For people with income above Medicaid limits,
but below 400% of federal poverty level.
2014

Expansion of small business Health Insurance Credit
to a 50% credit for small businesses who purchase
insurance through SHOP (Exchange).
Small Business Health Insurance Credits
2014

Pay or Play Employer Mandate
Employers with 50 or more FTE employees must
either offer health insurance, or pay a penalty
• $2,000/employee, but first 30 are not counted
• Still subject to penalty even if coverage is
offered, but employee receives tax credit
2015

States May Allow Larger Employers to buy on Exchange
• Businesses with more than 100 employees may
be able to purchase insurance in the SHOP
2017

Excise Tax on “Cadillac” Plans
• 40% Excise tax on plans with costs exceeding:
• $10,700 for individuals
• $27,500 for family
2018

That was Easy!!!!
2018

091813 ppaca slide deck flinchbaugh

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091813 ppaca slide deck flinchbaugh