Legislative Alert: 2013 Changes to Medicare and Medicaid
Upcoming SlideShare
Loading in...5
×

Like this? Share it with your network

Share

Legislative Alert: 2013 Changes to Medicare and Medicaid

  • 338 views
Uploaded on

On January 1, 2013, several important changes to Medicare and Medicaid mandated by the Patient Protection and Affordable Care Act (PPACA) took effect. This Legislative Alert provides a brief update......

On January 1, 2013, several important changes to Medicare and Medicaid mandated by the Patient Protection and Affordable Care Act (PPACA) took effect. This Legislative Alert provides a brief update of many of those changes. For any specific legal or financial advice, it is recommended that you consult with a licensed professional in your state.

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
338
On Slideshare
335
From Embeds
3
Number of Embeds
1

Actions

Shares
Downloads
3
Comments
0
Likes
0

Embeds 3

https://twitter.com 3

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Legislative Alert: 2013 Changes toMedicare & Medicaid
  • 2. On January 1, 2013, several important changes toMedicare and Medicaid mandated by the PatientProtection and Affordable Care Act (PPACA) tookeffect. This Legislative Alert provides a brief updateof many of those changes. For any specific legal orfinancial advice, it is recommended that you consultwith a licensed professional in your state.
  • 3. Medicare Tax IncreaseBeginning on January 1, 2013, employers mustwithhold an additional 0.9 percent Medicare taxfrom employee paychecks with incomes overcertain thresholds.
  • 4. Questions and AnswersQ. When are employees or individuals subject to thetax?A. If an employee or individual’s wages, compensation, orself-employment income is above certain thresholds, theperson will be subject to the increased tax. The tax will applyto wages and compensation above the following thresholds:
  • 5. Questions and AnswersQ. What wages are subject to the tax?A. Any wages that are currently subject to the Medicaretax will be affected by the tax increase.
  • 6. Questions and AnswersQ. Does an employer have to withhold the additionaltax from my employee’s wages?A. Yes. An employer must withhold the additional tax fromwages paid to an individual in excess of the $200,000 amountregardless of the individual’s filing status or wages paid byanother employer.
  • 7. Questions and AnswersQ. If an employee surpasses the threshold limit viamultiple sources of income, can the employee requestadditional withholding from his employer?A. Not specifically for the purpose of the additional Medicare tax. If anemployee anticipates that their total income will surpass the threshold,but not through a single employer, the employee may request theemployer withhold an additional amount of income withholding on the IRSForm W-4. The additional income tax withholding will then be appliedagainst the employee’s taxes as shown on their tax return, including anyadditional Medicare tax liability.The employee also may make estimated tax payments if the employeebelieves that he or she will exceed the threshold via multiple sourcesof income.
  • 8. Questions and AnswersQ. If an employee or individual makes over $200,000annually, files jointly with his or her spouse, and thecouple makes less than $250,000, can the employeeask the employer to stop withholding the additionaltax?A. No. The employer must withhold the additional tax amount.However, the couple may claim credit for any additionalMedicare tax liability against the total tax liability on yourindividual income tax return.
  • 9. Questions and AnswersQ. Are employer’s required to match the amount of theadditional Medicare tax?A. No. Employers are not required to match the additional taxamount.For more information on the increased Medicare tax, pleasesee the following IRS Question and Answer page.
  • 10. Employer Retiree Coverage SubsidyAnother key change in 2013 concerns the Retiree DrugSubsidy Reduction. As of January 1, 2013, employerswill still receive the tax-free subsidy, but employers willno longer be able to deduct the cost of prescriptiondrugs to the extent reimbursed by the federal subsidyon their federal tax returns.
  • 11. Questions and AnswersQ. How is the Employer Retiree Coverage Subsidychanging?A. Prior to January 1, 2013, employers were eligible for a tax-free subsidyof 28% of the costs they incurred to provide a prescription drug benefitprogram to their retirees. This subsidy was authorized by the MedicareModernization Act of 2003. Employers were also able to deduct anyoutlays made with these subsidies to provide retiree drug coverage forincome tax purposes.This year, employers may still receive the subsidy, but will not be able todeduct the cost of the prescription drugs to the extent reimbursed by thesubsidy on federal tax returns.
  • 12. Questions and AnswersQ. What types of coverage does this apply?A. Prescription drug coverage that is actuarially equivalent tothe coverage offered under Medicare Part D is eligible for thefederal subsidy.
  • 13. Questions and AnswersQ. Is this coverage included in taxable income?A. The coverage is not included as taxable income.However, this change will eliminate the tax deduction to theextent of the subsidy received.
  • 14. Questions and AnswersQ. What kind of impact will this change have onbusinesses?A. Although the change just recently went into effect, aTowers Watson study estimated the total cost for U.S.corporate financial statements would be $14B if companiesdid not shift their retirees out of drug subsidy plans. AnAmerican Benefits Council study estimated that between 1.5Mand 2M retirees would have their drug coverage terminatedbecause employers would be forced to shift them intoMedicare Part D coverage.The exact impact on businesses remains to be seen.
  • 15. Increasing Medicaid Payments for Primary Care DoctorsBeginning in 2013, the federal government is increasing Medicaidpayment rates to primary care physicians. This increase is inresponse to Medicaid programs preparing to cover more patients.In 2013, the Medicaid payment rates are being increased to atleast 100 percent of associated Medicare rates.From 2011 to 2015, the federal government will also providefunding to Medicare to provide a 10 percent bonus payment forprimary care provided by qualified physicians. However, it shouldbe noted that Medicare and Medicaid reimbursements aretypically lower than private payer reimbursement rates.
  • 16. Expanded Authority to Bundle Medicare PaymentsTo encourage hospitals, doctors and other providers to worktogether, PPACA allows for payment bundling. This meanshospitals, doctors and providers are paid a flat rate for an episodeof care rather than the current fragmented system where eachservice or test is billed separately to Medicare.These are only some of the changes that will be implemented in2013.We will continue to keep you apprised of changes as they occur,and will tell you what you need to know to remain compliant withPPACA.
  • 17. Find out more about usBenefitMall is a complete Broker services company providing products, servicesand tools to make selling employee benefits to businesses more efficient. Ourability to meet your business needs, and go above and beyond, is what hasmade BenefitMall the nations leading General Agency. BenefitMall offers plansfrom more than 125 leading insurance carriers, and with more than 175,000 in-force groups, we support nearly two million employees and their dependents.CompuPay, A BenefitMall Company, is among the largest payroll providers inthe U.S. and in 2010 celebrated 30 years serving small- and mid-sizedbusinesses across our nation. We serve clients ranging from small start-upbusinesses with one employee to national corporations with several thousandemployees.Healthcare Exchange® is an online community powered by BenefitMall focusedon educating and supporting broker and carrier partners. The platform allowsindustry experts to participate by weighing in on topics that are current to thehealth insurance market, communicate with their colleagues and find pertinentinformation on the latest activities in health care reform.