Individual Mandate Excise Tax (Page 324/Sec. 1501/Jan 2014): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax according to the higher of the following (page 71 of manager’s amendment updates Reid bill):
|
Single
|
2 People
|
3+ People
|
2014
|
$495/0.5% AGI
|
$990/0.5% AGI
|
$1485/0.5%/AGI
|
2015
|
$495/1.0% AGI
|
$990/1.0% AGI
|
$1485/1.0%/AGI
|
2016+
|
$495/2.0% AGI
|
$990/2.0% AGI
|
$1485/2.0%/AGI
|
If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer).
Excise Tax on Comprehensive Health Insurance Plans (Page 1979/Sec. 9001/$149.1 bil/Jan 2013): Starting in 2013, new 40 percent excise tax on “Cadillac” health insurance plans ($8500 single/$23,000 family). Higher threshold ($9850 single/$26,000 family) for early retirees and high-risk professions. CPI +1 percentage point indexed. Longshoremen have been exempted (page 362 of the manager’s amendment)
From 2013-2015, the 17 highest-cost states are 120% of this level.
Hike in Medicare Payroll Tax (Page 2040/Sec. 9015/$86.8 bil/Jan 2013): Current law and changes:
|
First $200,000
($250,000 Married) Employer/Employee |
All Remaining Wages
Employer/Employee |
Current Law
|
1.45%/1.45%
2.9% self-employed |
1.45%/1.45%
2.9% self-employed |
Reid-Obama Tax Hike
|
1.45%/1.45%
2.9% self-employed |
1.45%/2.35%
3.8% self-employed |
The 0.9% new rate addition is not deductible for the self-employment tax adjustment. Updated by page 372 of manager’s amendment.
HSA Withdrawal Tax Hike (Page 1998/Sec. 9004/$1.3 bil/Jan 2011): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.
Flexible Spending Account Cap – aka “Special Needs Kids Tax” (Page 1999/Sec. 9005/$14 bil/Jan 2011): Imposes cap on FSAs of $2500 (now unlimited). Indexed to inflation after 2011 (added on page 363 of manager’s amendment). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education.
Tax on Medical Device Manufacturers (Page 2020/Sec. 9009/$19.2 bil/Jan 2010): Medical device manufacturers employ 360,000 people in 6000 plants across the country. This bill would impose a new $2 billion annual tax on the industry imposed relative to shares of sales made that year. Exempts items retailing for <$100. Rises to $3 billion annually in 2017 (updated by page 364 of manager’s amendment).
Raise "Haircut" for Medical Itemized Deduction from 7.5% to 10% of AGI (Page 2034/Sec. 9013/$15.2 bil/Jan 2013): Currently, those facing high medical expenses are allowed a deduction if the total cost of the expenses reduces the filer’s income by 7.5%. The new provision would impose a threshold of 10%. Waived for 65+ taxpayers in 2013-2016 only
Tax on Indoor Tanning Services (Page 373 of Manager’s amendment/$2.7 billion/July 1, 2010): New 10% excise tax on Americans using indoor tanning salons
Blue Cross/Blue Shield Tax Hike (Page 2044/Sec. 9016/$0.4 bil/Jan 2010): The special tax deduction in current law for Blue Cross/Blue Shield companies would only be allowed if 85 percent or more of premium revenues are spent on clinical services