Fall 2010 issue of Horizons

How Healthcare Reform Will Affect You and Your Business

The Patient Protection and Affordable Care Act (H.R. 3590), was signed into law on March 23, 2010 by President Obama. Along with its reconciliation bill titled, the Health Care and Education Tax Credits Reconciliation Act of 2010 (H.R. 4872), this new healthcare legislation contains numerous tax provisions which may impact individuals and businesses. This is an executive summary of the many tax provisions in both the Patient Protection Act and the House Reconciliation Act. Overall, the newly enacted healthcare legislation will fundamentally alter the healthcare landscape for individuals and employers. Individuals All individuals not covered by Medicaid or Medicare would be required to obtain health care coverage or pay penalties. Employer provided coverage satisfies the universal coverage requirement. Penalties For Remaining Uninsured • Beginning in 2016, the greater of: (1) 2.5 percent of household income over the income threshold required for income tax return filing, or (2) $695 per uninsured adult. • Maximum penalty cannot exceed 300 percent of the per adult penalty ($2,085). • Phased-in per adult: $95 in 2014; $325 in 2015; $695 in 2016 for the flat fee or 1 percent of taxable income in 2014, 2 percent in 2015, and 2.5 percent in 2016. • For individuals under the age of 18 or in college, the applicable flat dollar penalty would be one-half of the above amounts. Coverage Subsidies • Tax credits and reduced cost sharing apply to qualified individuals based on a sliding scale.

• The subsidy credit starts at 133 percent of the federal poverty level. • Medicaid coverage is expanded to cover those with income less than 133 percent of the federal poverty level.

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