Healthcare Reform - Implications to Businesses

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Healthcare Reform - Implications to Businesses Resources Global Professionals Finance & Accounting Blog Friday, March 26. 2010 Healthcare Reform - Implications to Businesses Prolific blogging today! Congress has passed both HR 2590, the Patient Protection Affordable Care Act and HR 4872, The Reconciliation Act as of March 25, 2010. The following are some of the provisions that may impact businesses:

- Medicare Part D subsidy is no longer tax-free (see previous blog entry for details on how this will impact 1Q10 financial reporting as well as how it will impact ongoing earnings)
- Health insurance providers will pay an annual fee based on net premiums written beginning in 2014. The fee is calculated on an escalating schedule and are not deductible for federal tax purposes
-Pharmaceutical companies that manufacture or import brand-name drugs for sale to a government program will pay an annual fee beginning in 2011. It will be calculated based on each company's relative market share and are not deductibel for federal tax purposes.
- 40% excise tax on high-cost employer-sponsored coverage (so-called Cadillac Plans) beginning in 2018. The tax is calculated by the employer, but paid for by the insurance company or plan administrator. High-cost is considered in excess of $10,200 for individuals and $27,500 for families.
- 2.3% excise tax on Medical Device Manufacturers.
- Fines for large companies that fail to provide coverage to employees of $2,000 per employee
- Employer W2 reporting of value of health benefits beginning in 2011

There are also changes that will impact individuals such as a 10% excise tax beginning July 1, 2010 on indoor tanning services, an excise tax for the uninsured of $695 (2014), refundable tax credits for eligible taxpayers to help cover the cost of insurance premiums, extension to age 26 for a child to be considered a "dependent" for medical costs, Medicare tax on investment income of 3.8% for individuals earning more than $200,000 and married couples earning more than $250,000 (investment income defined as income from interest, dividends, annuities, royalties and rents), limiting flexible spending account contributions beginning in 2013 to $2,500, Medicare payroll taxes will increase by .9% for individuals earning more than $200,000 and married couples earning more than $250,000, and an increase in the AGI floor on medical expenses in 2013 to 10%.