Patient Protection and Affordable Care Act / Obama Care

Taxes you may want to be aware of:

Individual Mandate Excise Tax. So much for "you can keep your old plan if you want!" As of January 2014 if you do not buy a "qualified" health insurance plan you will pay an income surtax according to the higher of the following; one adult 1% of AGI or $95; two adults 1% AGI or $190; 3 or more adults 1% AGI or $285.

2015 Again the higher of the two; one adult 2% of AGI or $325; two adults 2% AGI or $650; 3 or more adults 2% AGI or $975.

2016 Again the higher of the two; one adult 2.5% of AGI or $695; two adults 2.5% AGI or $1390; 3 or more adults 2.5% AGI or $2085. Actual text of this law can be found on pages 317-337 of the PPACA.

Employer Mandate Tax. Employers with 50 or more employees that do not offer health care coverage and at least one employee qualifies for a health care tax credit, the employer must pay an additional non-deductible tax of $2000 for all full time employees. If the employee actually recieves coverage through the exchange, the penalty on the employer for that employee rises to $3000. If the employer requires a waiting period (which most do as a way to keep costs down as enrolling people who leave creates necessary paperwork and fees for the insurance carrier), to enroll in coverage of 30-60 days, there is a $400 tax per employee. If it is longer than 60 days the penalty rises to $600. Actual text of this law can be found on pages 345-346 of the PPACA.


Medical Cabinet Tax, ever use your FSA or HRS money to pay for over the counter medicine? We you can't any-longer thanks to Obama care, you can no longer use Flexible Spending Accounts or Health Reimbursement Accounts pre-tax dollars to purchase non-prescription, over the counter medicines with the exception of insulin. Actual text of this law can be found on pages 1957-1959 of the PPACA.

Increase in the Health Savings Account Withdrawal Tax. Additional taxes on non-medical withdrawals from an HSA from 10% to 20% Actual text of this law can be found on page1959 if the PPACA

Charitable Hospitals will be hit with an Excise Tax $50,000 if they fail to meet a community health assessment needs analysis; financial assistance and billing and collections rules all set by Health and Human Services . Actual text of this law can be found on pages 1961-1971 of the PPACA.

Excise Tax for innovation! Drug companies will pay a $2.3 billion annual tax based on the companies share of sales in the market for innovator drugs. Actual text of this law can be found on pages 1971-1980 of the PPACA.

Medical Device Manufacturers Tax. This will impose a 2.3% excise tax on any item over $100 retail. Who do you think this will effect? Actual text of this law can be found on pages 1980-1986 of the PPACA.

Medical Itemized Deduction will get a haircut from 7.5% to 10% of Adjusted Gross Income. Meaning if you have high medical bills you currently can deduct the medical expenses to the extent that those expenses exceed 7.5% of you AGI. That threshold will be moved to 10% which is 2.5% of your income that will be lost. Actual text of this law can be found on pages 1994-1995 of the PPACA.

Special Needs Kids Tax. So much for Obama's love for the special needs kids in our country, with this act he has made it so FSA now has a limit of $2500 per year, where as the current amount is unlimited. Fortunately, I do not have a special needs kid of my own, so I am not sure of the cost involved, but I do know with healthy non special needs kids the costs for medical can far exceed $2500. For someone who needs constant attention from physicians and therapists $2500 a year is ludicrous. Actual text of this law can be found on pages 2388-2389 of the PPACA.


Indoor Tanning Tax! this one is just ridiculous! A 10 percent excise tax on Americans using indoor tanning salons. Actual text of this law can be found on pages 2397-2399 of the PPACA.


Tax hike of $4.5 billion through the classification of the "economic substance doctrine" The IRS will now have the ability to disallow completely-legal tax deductions and minimizing plans at their discretion because they feel it lacks "substance" and is merely intended to reduce the amount of taxes one owes. Actual text can be found on the Reconciliation Act pages 108-113.