Health Care Provisions

The health provisions of the health care reform package come in to effect over a number of years. Several key provisions come into effect in 2010, including a small business tax credit to help offset the cost of employer-provided coverage and provisions concerning coverage of young persons on their parents’ health coverage through age 26. However, most of the more significant changes, including those relating to insurance coverage, are delayed until later years, with the provisions related to insurance coverage first kicking in in 2014.

The following timeline shows the years when the major tax provisions come into effect:

  • Adult Child Coverage
  • Indoor Tanning Tax
  • Small Employer Tax Credit
  • Only Prescribed Medicines Covered by FSAs/HSAs
  • Simple Cafeteria Plans Available
  • Employer W-2 on Value of Health Benefits
  • Medicare 0.9% Increase for $200k/$250k + Wages
  • 3.8% Tax on Investment Income of High Income Taxpayers
  • 10% AGI Floor on Itemized Medical Expenses
  • $2,500 Cap on FSAs
  • Individual Shared Responsibility Penalty
  • Large Employer Mandate- “Play-or-Pay”
  • Coverage Subsidies
  • Excise tax on “Cadillac plans”

Other non-tax provisions taking effect in 2014 include:

  • The elimination of preexisting condition limitations;
  • The allowance of premium rating by individual or family coverage, geographic area, age (limited to a 3-1 ratio), and tobacco use (limited to a 1.5-1 ratio);
  • Guaranteed issue and renewability.
  • A blanket prohibition against discrimation because of health status