BY MARY E. VANDENACK
Congress has now passed a comprehensive health care law earlier this year. Many of changes are phased in. The following are some key changes that are effective for 2010.
- Small business tax credit: Small businesses (generally 25 or less employees) are provided tax credits to help offset the cost of employer-provided health insurance coverage. The qualified small employer much contribute at least one half of the cost of health insurance premiums for coverage of its participating employers.
- Dependent coverage increases to age 26: Health insurance plans must provided for coverage of dependent children up to the age of 26. The employer-provided health coverage gross income exclusion is extended to coverage for such adult children. Self-employed individuals are allowed a deduction for the premiums paid on such coverage.
- No lifetime limits on coverage: health plans are banned from placing lifetime limits on coverage.
- No discrimination against children with pre-existing conditions: The new law prohibits all employer plans and new plans in the individual market from denying coverage to children with pre-existing conditions.
- Temporary re-insurance program for early retirees: The new law creates a temporary re-insurance program for employer-sponsored early retiree coverage. Payments made und erhte program will be excludible from gross income.
- Rebate for Medicare beneficiaries: A $250 rebate is provided to Medicare beneficiaries who hit the donut hole in 2010.
- Indoor Tanning Tax: A 10 percent excise tax is imposed on qualified indoor tanning services for services provided on or after July 1st, 2010.
- Temporary pool for high risk individuals: Immediate access to insurance is provided for those who are uninsured due to a pre-existing condition.
Some of the other key, tax-related provisions that phase in over the next several years are as follow:
- A refundable premium assistance tax credit to help make coverage more affordable, starting in 2014;
- A national voluntary long term care insurance program;
- A nondeductible penalty on large employers tha fail to offer the opportunity to employees to enroll in minimum essential coverage;
- A penalty tax on individual who fail to maintain minimum essential coverage;
- Additional Medicare payroll tax on earned income in excess of $200,000 for individuals and $250,000 for married taxpayers;
- Medicare tax on certain income fo trusts and estates;
- Medicate tax on unearned income;
- Tax on high cost insurance;
- Modified definitions of qualified medical expenses for health FAS’s, HSA’s and HRA’s;
- Increase in tax on non-qualified distributions from HSA’s;
- Increased threshold for the itemized medical expense deduction;
- New therapies credit to encourage investments in new therapies;
- Elimination of subsidy for employers that maintain prescription drug coverage for retirees who are eligible for Medicare Part D.
metroMAGAZINE, May 2010