What does Health Care Reform mean for you?
August 5, 2010
Today I was researching my options for health insurance coverage for me and my employees. I realized that this would be a good time to address some of the changes from the 2010 Health Care Act and how several of the tax provisions might affect your 2010 and 2011 federal income tax liability and reporting requirements.
If you run a business or small business, or if you’re self-employed, the following legislation may affect you:
• Credit for Employee Health Insurance Expenses of Small Business — Beginning in 2010, eligible small businesses can receive a nonrefundable tax credit of up to 35% (25% for tax-exempt small employers) of the total premium cost of providing health care to their workers. The credit will be taken when you file your 2010 tax return.
• Trade or Business Expenses — Effective March 30, 2010, self-employed taxpayers can deduct amounts paid during the taxable year for medical insurance covering the taxpayer, the taxpayer’s spouse, dependents, and children under age 27.
Changes impacting individuals include:
• Expansion of Adoption Credit and Adoption Assistance Programs — Effective for taxable years beginning after 2009, the adoption credit and adoption assistance programs are expanded by increasing the maximum amount of adoption expenditures that may be claimed as a credit to $13,170, including a child with special needs. Other changes apply as well.
• Amounts Received Under Accident and Health Plans — Effective March 30, 2010, you are no longer required to include in your income employer-provided accident or health plan reimbursements for medical care expenses paid on behalf of your child up to the age of 27, a big change from the current age of 19 or 24 if the child is a full time student.
Are you still wondering how health care legislation will impact you and your employees? This is a confusing law and though some provisions will not take effect for several years, many changes could affect you today. Also, some tax-planning opportunities and requirements become effective in 2010 or 2011.
Below are some key provisions of the health care acts (P.L. 111-148 and P.L. 111-152) that impact employers and health plans and generally are effective in 2010 or 2011. Note that some effective dates apply to plan years or taxable years.
Effective September 23, 2010:
• Insurers and group health plans that offer dependent coverage are required to allow uninsured children to remain on their parents’ health insurance through age 25.
• Small and large group market plans are prohibited from imposing lifetime limits on coverage.
• Plans must provide coverage, without cost-sharing, for preventive services and immunizations.
• Insurance companies are prohibited from rescinding coverage, except in cases of fraud or intentional misrepresentation of material fact.
• No discrimination based on the wages of employees.
• All health insurance plans are prohibited from excluding children under age 19 on the basis of a pre-existing condition.
Effective 2011:
• Employers must report on Form W-2 the cost of employer-sponsored health insurance.
• Health flexible spending accounts, health reimbursement arrangements, health savings accounts (HSAs) and Archer medical savings accounts (MSAs) may reimburse for medications that are prescribed drugs or insulin only (no over-the-counter medications).
• The tax on distributions from an HSA or Archer MSA that are not used for qualified medical expenses is raised to 20%.
• Small employers (average of 100 or fewer employees in either of two preceding years) may establish “simple cafeteria plans.”
Correct information is the key to good planning and these changes will affect most American taxpayers in one way or another. If you have questions about how health care reform will affect you, please give me a call.
August 16, 2010 at 5:54pm | Permalink
Thanks to the post. I think it’s fair enough the package deal of health reform.
August 17, 2010 at 10:28pm | Permalink
True reform not deform. Find out who’s paying off the democrats in office, pharmaceutical companies, insurance companies and any other special interest groups tied to hiking up prices, then get rid of them one way or another.
September 2, 2010 at 11:17pm | Permalink
Thanks for posting this up Shauna. Ill be passing this article along to people who just want a quick info on the impact of the new health care bill.
September 7, 2010 at 9:30am | Permalink
I need to put my fiance on my medical bc I really think he needs to see a doctor soon. But for the good insurance it would be 120 every paycheck. I live paycheck to paycheck now so that would be very hard. This one insurance offered is 70 bucks a check BCBS high deductible. Now its like 80% covered after the deductible. I mean I do not know how good this is. I mean we prolly don’t need a doctor but a few times a year and he needs to go soon. So what could I expect to pay for a doctors visit and presciption medicine?
September 15, 2010 at 8:59pm | Permalink
Any kind of reform involving citizen welfare is always beneficial and should be the top priority of our government.
September 25, 2010 at 1:35am | Permalink
This is really informative article about health care insurance.is any tax relaxation benefits are there when put the health care insurance…
November 22, 2010 at 11:32pm | Permalink
What a nice theme!! I love your and post. Thanks and sharing more info.
December 7, 2010 at 4:09am | Permalink
Don Manzullo suggests to implement system of deductions of expenses on life insurance and health from the general tax declaration that, in its opinion, will allow to cut down expenses of small-scale business on provision of insurance of the workers more than for 15%.
December 8, 2010 at 11:07pm | Permalink
health care is very essential for everyman. if they do not look after then their health will not better. i agree with you.
December 30, 2010 at 11:21am | Permalink
Health Care reform, is doing something that hasn’t been done yet.
It’s not socialization, it’s taking a step in a direction to help save millions of lives.
If we look at the highest standard of living countries in the world. ALL of them have a national health care plan. Yes, they pay higher taxes, BUT you don’t have sick people who can’t afford to get better. You don’t have homeless people wondering the streets. EVERYONE is taken care of.
January 4, 2011 at 8:51am | Permalink
thanks for the sharing this topic. i like it very much. wish you all the best.
January 5, 2011 at 8:42am | Permalink
I think the insurance packages are great the way they are. Now if only I could get a package for my apartment as well.
January 25, 2011 at 8:53pm | Permalink
Pretty good article! I also realize that this would be a good time to address some of the changes from the 2010 Health Care Act. Thanks
February 25, 2011 at 1:46am | Permalink
So brilliant content. I think that health care is very important for every person. A lot of people take care of their health. Thanks for sharing.
March 8, 2011 at 12:39am | Permalink
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March 19, 2011 at 7:51am | Permalink
This article will help everyone to know so much important information. It is very alternative for people and this article can help anybody.
March 22, 2011 at 2:00am | Permalink
This is very enlightening especially for small business owners.Kudos to you for sharing this comprehensive article on this matter.
March 24, 2011 at 10:49pm | Permalink
Brilliant concept! This is a confusing law and though some provisions will not take effect for several years, many changes could affect you today. Thanks!
April 8, 2011 at 11:30pm | Permalink
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April 22, 2011 at 3:00am | Permalink
Effective article created on health care! I doubt the new plans and reforms will end up costing me less, but I would like to see some changes that would benefit me, for instance, access to ALL drs and facilities. The network in my current plan is lame. Thanks
In your bullet point of Effective September 23, 2010 you stated that Insurers and group health plans that offer dependent coverage are required to allow uninsured children to remain on their parents’ health insurance through age 25. I believe you will find the child can stay on the parents insurance until the end of the year in which they turn 26. Thus if the child turns 26 in January they will actually be covered until they are nearly 27.
May 7, 2011 at 2:34am | Permalink
I hope that we will have a similar project here in my country. Its a good start for small businesses and its really very inspiring.
June 13, 2011 at 5:07am | Permalink
The problem is that it would effectively kill the health insurance industry and they are far too powerful in Washington to let that happen. That means while this is definitely the right choice for the American people, we are unlikely to see it actually happen because too many rich fat cats have corrupted our political system.
July 5, 2011 at 11:11pm | Permalink
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July 13, 2011 at 7:47pm | Permalink
In the United States, the debate regarding healthcare reform includes questions of a right to health care, access, fairness, sustainability, quality and amounts spent by government. Additional information: Health care was reformed in 1948 with the creation of the National Health Service or NHS. It was originally established as part of a wider reform of social services and funded by a system of National Insurance, though receipt of health care was never contingent upon making contributions towards the National Insurance Fund.