Major Health Care Reform Provisions by Impacted Group

Businesses, large and small, have many questions regarding the Affordable Care Act (ACA). Here's a quick overview of the major provisions impacting the following groups:

1. Employers

2. Individuals

3. Medicare

4. Medicaid

5. Taxes

1. Major Health Care Reform Provisions Impacting Employers

• Required to provide "affordable" and "qualified" coverage or else pay tax penalties (firms with less than 50 full-time equivalent employees are not subject this requirement)

• New small business tax credit to purchase coverage

• New insurance exchanges for small-group and individual markets

• Limits on underwriting

• Elimination of tax deduction for retiree drug subsidies to employers

• Restrictions on Flexible Spending Account (FSA) salary deferral contributions

2. Major Health Care Reform Provisions Impacting Individuals

• Required to purchase minimum essential coverage or else pay tax penalties

• New mandated benefits in individual market

• Tax subsidies to purchase individual health insurance coverage in an exchange

• Limits on cost sharing

• Limits on underwriting

• Increase in floor for itemized medical deduction from 7.5% to 10%

• Restrictions on use of HSAs, FSAs, HRAs for over the counter drugs

3. Major Health Care Reform Provisions Impacting Medicare

• Part D coverage gap closed over time

• Payment reductions to hospitals, physicians, etc.

• Payment reductions to Medicare Advantage plans

• Does not address physician payment issue

• New rebates on drugs

4. Major Health Care Reform Provisions Impacting Medicaid

• Expansion of coverage to 133% of poverty for all Americans (subject to State approval)

• Temporary enhanced federal payments to states

• Enhanced rebates on drugs

5. Major Health Care Reform Provisions Impacting Taxes

• Medicare payroll tax increased by 0.9% for upper income

• New 3.8% tax on investment for upper income $1 then $2-per-life tax on all insurance policies to fund research

• High-cost plan tax of 40% for plans above $10,200 individuals/$27,500 families

• New fees on drug, device manufacturers

• New fees on health insurers

Note: This should not be taken as legal or tax advice.