CCH issues Special Tax Briefing to explain final tax provisions of health care reform legislation

CCH has issued a Special Tax Briefing to explain the final tax provisions of health care reform legislation. With the passage of the Patient Protection and Affordable Care Act and a companion Health Care and Education Tax Credits Reconciliation Act in the House, the stage is set for Senate concurrence through a simple majority vote and signing by the president to wind up the long legislative path to health care reform. To read the Briefing, click here.

"It is certain that the IRS will play a large role in broadening insurance coverage through tax incentives and penalties on the one hand, and on the other hand collecting new taxes to pay part of the costs," said CCH Principal Federal Tax Analyst Mark Luscombe, JD, LLM, CPA.

The bill contains an excise tax on "Cadillac" insurance plans – those with more generous benefits and higher premiums than typical plans – an excise tax on medical devices, "industry fees" on various health-related industries and a Medicare surtax of .9 percent on wages and 3.8 percent on investment income for individuals with adjusted gross incomes over $200,000 for an individual, $250,000 for couples. Except for seniors, it raises the threshold for the itemized medical deduction from 7.5 percent of adjusted gross income to 10 percent. Beginning in 2013, it will limit contributions to tax-advantaged flexible spending accounts for health expenses.

"The bill aims to broaden coverage, with individual and employer mandates, and those mandates are backed up by using the IRS to assess payments on individuals who choose to remain uninsured and employers who choose not to offer group health plans," Luscombe said.

Other revenue raisers include closing a loophole related to biofuel production, codification of the economic substance doctrine and an adjustment to corporate estimated tax payments in 2014.

CCH Tax Briefings

To read the CCH Special Tax Briefing on health care reform, click here. Timely, current analysis of other tax legislation can be found at CCH Tax Legislation Coverage.

SOURCE CCH, a Wolters Kluwer business