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091813 ppaca slide deck flinchbaugh
1. An overview of the
administrative and tax
requirements of the Lawโฆ
2010โฆ
2011โฆ
2012โฆ
2013โฆ
2014โฆ
2015โฆ
2016โฆ
2017โฆ
2018โฆ
ยป 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
3. President Obama Signs law
March 23, 2010
now what???
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
4. 35% tax credit applicable for:
โข Businesses with less than 25 FTE employees &
average wages less than $50,000.
โข Credit reduced as # of employees exceeds 10 and
average wage exceeds $25K.
Small Business Health Insurance Credits Begin
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
2010
5. Tax applicable for services rendered after July 1,
2010.
10% Excise Tax on Indoor Tanning Services
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
2010
7. โข Over the counter drugs NO LONGER qualify.
โข Non-qualified distributions subject to 20%
penalty vs. 10% under old law.
Modifications to qualified expenses from FSAโs,
HSAโs, and HRAโs and increased penalties.
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
2011
8. Medical Loss Ratio Limits Begin
โข Small group and individual insurers-80%.
โข Large group-85%.
โข Excess premiums must be refunded.
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
2011
10. Reporting of Health Insurance on W-2
โข Employers issuing more than 250 W-2โs required
to report health benefits on W-2
โข Still waiting for final regulations regarding
companies with less than 250
โข Not taxable โ just information
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
2012
11. Summary of Benefits Required
โข Renewals on or after 9/23/12
โข Notice of change in benefits must be provided 60
days before change
โข Insurance company should be providing this
reporting for employers
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
2012
12. Employers Begin to Receive MLR rebates
โข Can be used to offset future premiums.
โข If employees contribute to premiums, they must
receive proportionate share of rebate.
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
2012
14. Increased Medicare Tax (Hospital Insurance Tax)
โข .9% of wages in excess ofโฆ
โข $200,000 if single.
โข $250,000 MFJ.
โข Employers MUST withhold on wages paid in
excess of $200,000 to individual.
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
2013
15. Unearned Income Medicare Contribution Surtax
โข 3.8% on lessor of:
โข Net investment income or
โข Excess of modified AGI over $200/S, $250/MFJ.
โข Investment income (interest, dividends, royalties,
rents, sale of passive activity, passive activity).
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
2013
16. Increased Threshold for Deducting Medical Expenses
โข Threshold raised to 10% of AGI.
โข If over 65 - 7.5% limit still applies through
December 31, 2017.
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
2013
17. Flexible Spending Account Limits
โข Annual limit of $2,500 for contributions to
flexible spending accounts.
โข No impact on premium or dependent care.
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
2013
18. 2.3% Excise Tax on Medical Device Manufacturers
โข Exemptions
โข Eyeglasses.
โข Contacts.
โข Any device generally purchased by the public at
retail.
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
2013
19. Patient Centered Outcomes Research Institute Fee - PCOR
โข Assessed on medical plans โ usually paid by
carrier.
โข Employer may be subject with any type of self
insurance.
โข $1 per covered life, increasing to $2 than indexed
with inflation.
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
2013
20. Notice of Coverage- Due 10/1/13
โข Employers required to provide
โข Must include:
โข Description of services offered on Exchange
โข Potential eligibility for premium credit
โข Info about impact of purchasing through Exchange
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
2013
22. Individual Mandate
โข Maintain โminimum essential coverageโ or:
โข 2014 - Penalty (Tax) greater of 1% of household
income OR $95 per uninsured
โข 2015 โ Penalty (Tax) greater of 2% of household
income or $325 per uninsured
โข Penalty Cap of $2,250 per household
โข There are some exceptions to the penalty
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
2014
23. โTax Creditsโ for Individuals Purchasing Through Exchange
โข A subsidy for purchasing insurance through the
Exchange.
โข For people with income above Medicaid limits,
but below 400% of federal poverty level.
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
2014
24. 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
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
2014
26. Pay or Play Employer Mandate
Employers with 50 or more FTE employees must
either offer health insurance, or pay a penalty
โข $2,000/employee, but first 30 are not counted
โข Still subject to penalty even if coverage is
offered, but employee receives tax credit
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
2015
28. States May Allow Larger Employers to buy on Exchange
โข Businesses with more than 100 employees may
be able to purchase insurance in the SHOP
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
2017
30. Excise Tax on โCadillacโ Plans
โข 40% Excise tax on plans with costs exceeding:
โข $10,700 for individuals
โข $27,500 for family
SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
2018