091813 ppaca slide deck flinchbaugh

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SEK&Co, Strickler Agency and Capital Blue Cross Presented a Seminar on Affordable Care Act Compliance Issues for Employers and Individuals.

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091813 ppaca slide deck flinchbaugh

  1. 1. An overview of the administrative and tax requirements of the Law… 2010… 2011… 2012… 2013… 2014… 2015… 2016… 2017… 2018… » The Patient Protection and Affordable Care Act Joel A. Flinchbaugh, CPA Member of the Firm Smith Elliott Kearns & Company, LLC Jflinchbaugh@sek.com www.SEK.com SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
  2. 2. SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
  3. 3. President Obama Signs law March 23, 2010 now what??? SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
  4. 4. 35% tax credit applicable for: • Businesses with less than 25 FTE employees & average wages less than $50,000. • Credit reduced as # of employees exceeds 10 and average wage exceeds $25K. Small Business Health Insurance Credits Begin SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2010
  5. 5. Tax applicable for services rendered after July 1, 2010. 10% Excise Tax on Indoor Tanning Services SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2010
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  7. 7. • Over the counter drugs NO LONGER qualify. • Non-qualified distributions subject to 20% penalty vs. 10% under old law. Modifications to qualified expenses from FSA’s, HSA’s, and HRA’s and increased penalties. SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2011
  8. 8. Medical Loss Ratio Limits Begin • Small group and individual insurers-80%. • Large group-85%. • Excess premiums must be refunded. SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2011
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  10. 10. Reporting of Health Insurance on W-2 • Employers issuing more than 250 W-2’s required to report health benefits on W-2 • Still waiting for final regulations regarding companies with less than 250 • Not taxable – just information SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2012
  11. 11. Summary of Benefits Required • Renewals on or after 9/23/12 • Notice of change in benefits must be provided 60 days before change • Insurance company should be providing this reporting for employers SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2012
  12. 12. Employers Begin to Receive MLR rebates • Can be used to offset future premiums. • If employees contribute to premiums, they must receive proportionate share of rebate. SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2012
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  14. 14. Increased Medicare Tax (Hospital Insurance Tax) • .9% of wages in excess of… • $200,000 if single. • $250,000 MFJ. • Employers MUST withhold on wages paid in excess of $200,000 to individual. SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2013
  15. 15. Unearned Income Medicare Contribution Surtax • 3.8% on lessor of: • Net investment income or • Excess of modified AGI over $200/S, $250/MFJ. • Investment income (interest, dividends, royalties, rents, sale of passive activity, passive activity). SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2013
  16. 16. Increased Threshold for Deducting Medical Expenses • Threshold raised to 10% of AGI. • If over 65 - 7.5% limit still applies through December 31, 2017. SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2013
  17. 17. Flexible Spending Account Limits • Annual limit of $2,500 for contributions to flexible spending accounts. • No impact on premium or dependent care. SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2013
  18. 18. 2.3% Excise Tax on Medical Device Manufacturers • Exemptions • Eyeglasses. • Contacts. • Any device generally purchased by the public at retail. SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2013
  19. 19. Patient Centered Outcomes Research Institute Fee - PCOR • Assessed on medical plans – usually paid by carrier. • Employer may be subject with any type of self insurance. • $1 per covered life, increasing to $2 than indexed with inflation. SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2013
  20. 20. Notice of Coverage- Due 10/1/13 • Employers required to provide • Must include: • Description of services offered on Exchange • Potential eligibility for premium credit • Info about impact of purchasing through Exchange SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2013
  21. 21. SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
  22. 22. Individual Mandate • Maintain “minimum essential coverage” or: • 2014 - Penalty (Tax) greater of 1% of household income OR $95 per uninsured • 2015 – Penalty (Tax) greater of 2% of household income or $325 per uninsured • Penalty Cap of $2,250 per household • There are some exceptions to the penalty SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2014
  23. 23. “Tax Credits” for Individuals Purchasing Through Exchange • A subsidy for purchasing insurance through the Exchange. • For people with income above Medicaid limits, but below 400% of federal poverty level. SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2014
  24. 24. Expansion of small business Health Insurance Credit to a 50% credit for small businesses who purchase insurance through SHOP (Exchange). Small Business Health Insurance Credits SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2014
  25. 25. SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
  26. 26. Pay or Play Employer Mandate Employers with 50 or more FTE employees must either offer health insurance, or pay a penalty • $2,000/employee, but first 30 are not counted • Still subject to penalty even if coverage is offered, but employee receives tax credit SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2015
  27. 27. SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM
  28. 28. States May Allow Larger Employers to buy on Exchange • Businesses with more than 100 employees may be able to purchase insurance in the SHOP SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2017
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  30. 30. Excise Tax on “Cadillac” Plans • 40% Excise tax on plans with costs exceeding: • $10,700 for individuals • $27,500 for family SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2018
  31. 31. That was Easy!!!! SMITH ELLIOTT KEARNS & COMPANY, LLC WWW.SEK.COM 2018

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