New Health Care Legislative Summary On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act. On March 30, 2010 the President signed into law the Health Care and Education Reconciliation Act of 2010. Taken together these two bills comprise the Health Care legislation. The provisions of these new laws will be phased in over several years . The following summarizes many of the key features: 2010: A tax credit of up to 35% is available for employers with no more than 25 Full-Time employees and with average annual wages not in excess of $50,000. http://www.irs.gov/newsroom/article/0,,id=220848,00.html Health care coverage is extended to dependant children under age 27. A 10% indoor tanning tax is imposed. $250 will be paid to qualified Medicare participants to help with the Part D coverage gap. The credit for unprocessed biofuels is eliminated The adoption credit is increased by $1,000 and made refundable The adoption assistance exclusion is increased by $1,000. A High-Risk pool for people with pre-existing medical conditions is established. Group and individual plans are prohibited from placing lifetime dollar limits on coverage Insurers are prohibited from rescinding coverage except in cases of fraud. 2011: The cost of employer sponsored health coverage must be included on the W-2 The cost of over-the-counter drugs cannot be reimbursed on a tax-free basis through an HSA or MSA nor reimbursed through an FSA or HRA. The penalty on nonqualifying HAS or MSA distributions is increased to 20%. For small businesses a Simple Cafeteria Plan will be available. Grants will be given to small employers who establish wellness programs. Nutritional content must be disclosed on food vending machines and at chain restaurants. The Community Living Assistance Services and Supports (CLASS) program is launched. This is a federal voluntary program to provide living assistance. Higher Part D premiums begin for those with incomes over $85,000 ($170,000 for couples). 2012: Corporate information reporting will be required. Businesses that pay more than $600 a year to corporate providers of property and service must file a 1099. 2013: The threshold for claiming medical deductions on Schedule A is increased from 7.5% to 10% for those under 65. IN 2016 the 10% hurdle is extended to those age 65 and older. The deduction for employer Part D is eliminated. A 2.3% tax is imposed on sales by medical device manufacturers and importers. The Hospital Tax is increased by 0.9 percentage points on earnings over $200,000 ($250,000 for joint filers ). A surtax on unearned income of 3.8% is applied to net investment income on those taxpayers with Modified Adjusted Gross Income in excess of $200,000 ($250,000 for joint filers). Investment income includes interest, dividends, annuities, rents and royalties but not tax-exempt income. A $2,500 limit on FSA contributions is imposed. 2014: A penalty is imposed on those remaining uninsured. Low-income tax credits will be available for those participating in health exchanges. Employer Play or Pay. Employers who had at least 50 full time employees in the previous year must offer certain coverage or pay a penalty. New employer reporting responsibilities. 2018: An excise tax is imposed on high-cost employer-sponsored health plans.