• Approach
• Individual Mandate
• Employer Requirements
• Expansion of Public Programs
• Premium & Cost-Sharing subsidies to Individuals
• Insurance & Finance Health Reform
• Health Insurance Exchanges
• Benefit Design
• Changes to Private Insurance
• State Role
• Health System Performance
• Prevention Wellness
• Long Term Care
• Other Investments

Health Insurance

• A tax is imposed on individuals without qualifying coverage of the greater of $695 per year up to a maximum of three times that amount or 2.5% of household income to be phased-in beginning in 2014.
  
  
• The costs for over-the-counter drugs not prescribed by a doctor is excluded from being reimbursed through an Health Reimbursement Account (HRA) or health Federal Spending Account (FSA) and from being reimbursed on a tax-free basis through a Health Savings Account (HSA) or Archer Medical Savings Account (MSA). (Effective January 1, 2011)
  

• Tax on distributions from an HSA or an Archer MSA for non qualified medical expenses increases to 20% (from 10% for HSAs and 15% for Archer MSAs) of the disbursed amount. (Effective January 1, 2011)
  
  
• Contributions to a FSA for medical expenses is limited to $2,500 per year. This amount may increase annually based on a cost of living adjustment. (Effective January 1, 2013)
  
  
• The threshold for the itemized deduction for unreimbursed medical expenses increases from 7.5% of adjusted gross income to 10% of adjusted gross income for regular tax purposes. The increase is waived for individuals age 65 and older for tax years 2013 through 2016. (effective January 1, 2013)
  
  
• The Medicare Part A (hospital insurance tax rate on wages is increased by 0.9% (from 1.45% to 2.35%) on
  earnings over $200,000 for individual taxpayers and $250,000 for married couples filing jointly and impose a 3.8% tax on unearned income for higher-income taxpayers (thresholds are not indexed). (Effective January 1, 2013)
  
  
• An excise tax is imposed on insurers of employer-sponsored health plans with aggregate values that
  exceed $10,200 for individual coverage and $27,500 for family coverage (these threshold values will
  be indexed to the consumer price index for urban consumers (CPI-U) for years beginning in 2020).
  
  
• The threshold amounts will be increased for retired individuals age 55 and older who are not eligible
  for Medicare and for employees engaged in high-risk professions by $1,650 for individual coverage
  and $3,450 for family coverage. The threshold amounts may be adjusted upwards if health care costs
  rise more than expected prior to implementation of the tax in 2018. The threshold amounts will be
  increased for firms that may have higher health care costs because of the age or gender of their
  workers. The tax is equal to 40% of the value of the plan that exceeds the threshold amounts and is
  imposed on the issuer of the health insurance policy, which in the case of a self-insured plan is the
  plan administrator or, in some cases, the employer. The aggregate value of the health insurance plan
  includes reimbursements under a flexible spending account for medical expenses (health FSA) or
  health reimbursement arrangement (HRA), employer contributions to a health savings account (HSA),
  and coverage for supplementary health insurance coverage, excluding dental and vision coverage.
  (Effective January 1, 2018)
  
  
• The tax deduction is eliminated for employers who receive Medicare Part D retiree drug subsidy payments.
  (Effective January 1, 2013)

Financing Health Reform

• New annual fees on the pharmaceutical manufacturing sector, according to the following
  schedule:
  
  • $2.8 billion in 2012-2013;
  • $3.0 billion in 2014-2016;
  • $4.0 billion in 2017;
  • $4.1 billion in 2018; and
  • $2.8 billion in 2019 and later.
    
    
• Impose an annual fee on the health insurance sector, according to the following schedule:
  
  • $8 billion in 2014;
    
  • $11.3 billion in 2015-2016;
  • $13.9 billion in 2017;
  • $14.3 billion in 2018
  • For subsequent years, the fee shall be the amount from the previous year increased by the rate of
    premium growth.
    
    
• For non-profit insurers, only 50% of net premiums are taken into account in calculating the fee.
  Exemptions are granted for non-profit plans that receive more than 80% of their income from government
  programs targeting low-income or elderly populations, or people with disabilities, and voluntary
  employees’ beneficiary associations (VEBAs) not established by an employer. (Effective January 1, 2014)
  
  
• An excise tax of 2.3% is imposed on the sale on the sale of any taxable medical device. (Effective for sales after December 31, 2012)
  
  
• The deductibility of executive and employee compensation is limited to $500,000 per applicable individual for health insurance providers. (Effective January 1, 2009)
  
  
• A tax of 10% is imposed on the amount paid for indoor tanning services. (Effective July 1, 2010)
  
  
• Unprocessed fuels is excluded from the definition of cellulosic biofuel for purposes of applying the cellulosic biofuel producer credit. (Effective January 1, 2010)
  
  
• Clarify application of the economic substance doctrine and increase penalties for underpayments attributable to a transaction lacking economic substance. (Effective upon enactment)