Tax Policy

Urban assesses impact of capping tax exemption for employer-sponsored coverage

Posted on May 10, 2013

According to a study recently released by the Urban Institute, capping the tax exemption for employer-sponsored coverage could generate $264 billion in revenue by 2023. Limiting the Tax Exclusion of Employer-Sponsored Health Insurance Premiums: Revenue Potential and Distributional Consequences, funded by the Robert Wood Johnson Foundation, recommends capping the top 25% most expensive health benefits to raise this amount. The study finds such an option would lead to a 16% tax increase for those who file taxes in 2014, and a 20% increase for those who file in 2023.

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Tavenner answers Senate Finance Committee Questions

Posted on April 25, 2013

On April 9th, the Senate Finance Committee held a confirmation hearing for Marilyn Tavenner to be the Administrator of the Centers for Medicare and Medicaid Services (CMS). Committee members submitted additional questions to Tavenner post-hearing on topics ranging from consumer outreach in state insurance Exchanges to pediatric dental services. Health Reform GPS has compiled a list of the Affordable Care Act related questions submitted by the Senate Finance Committee members. The list contains the name of the Senator asking the question, the question number, and the relevant ACA topic addressed.

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Jackson Hewitt releases study on employer tax penalties for states that do not expand Medicaid

Posted on March 13, 2013

Today, Jackson Hewitt Tax Service released a study entitled, “The Supreme Court’s ACA Decision and Its Hidden Surprise for Employers: Without Medicaid Expansion, Employers Face Higher Tax Penalties Under ACA.” The study describes how employers in states that refuse expansion may face higher shared responsibility payments under the Affordable Care Act (ACA). Jackson Hewitt cites Texas as a specific example, stating that their refusal to expand may increase federal tax penalties on Texas employers by $299 to $448 million annually.

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Heritage Foundation finds ACA will negatively impact labor supply

Posted on March 13, 2013

A study released yesterday from the Heritage Foundation indicated that many Americans will bypass better jobs in order to retain healthcare subsidies provided to them by the Affordable Care Act (ACA). Beginning in 2014, insurance subsidies will be provided to families with household incomes below 400% of the federal poverty line. Since subsidy amount is tied to income, the Heritage Foundation argues that this provision in the law will deter individuals from taking higher paying jobs in order to subsidize their insurance purchase through the state marketplaces.

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Feds release ACA regulation roundup

Posted on March 1, 2013

The US Department of Health and Human Services (HHS) has released a flurry of regulations implementing various aspects the Affordable Care Act (ACA) today, including insurance market rules and rules related to the small business exchanges (SHOP). Additionally, both the Internal Revenue Service (IRS) and the Office of Personnel Management (OPM) have released ACA regulations. A list of the rules is…

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Final Rule: Taxable Medical Devices

Posted on February 13, 2013

The Internal Revenue Service (IRS) and Department of Treasury released the final Medical Device Tax rule on December 11, 2012. The rule imposes a tax on the sale of any “taxable medical device” by the manufacturer, producer or importer of a device. The amount of the tax is 2.3 percent of the price of the device, with an effective date of January 1, 2013.

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UPDATE: When Should Uninsured Family Members of Employees with Access to Affordable Self-Only Employer Coverage Qualify for Premium Tax Credits?

Posted on February 1, 2013

As noted in a previous Implementation Brief , the Affordable Care Act (ACA) allows for premium assistance through tax credits for the purchase of family coverage from qualified health plans sold through health insurance marketplaces. To be eligible for tax credits, individuals must not otherwise be “eligible for minimum essential coverage” and must have annual incomes of 100-400 percent of federal poverty level. With regard to individuals who are offered employer-sponsored coverage, the law states that in order to qualify for the premium tax subsidy, the employer-sponsored coverage must be deemed unaffordable, defined by the IRS as an employee contribution requirement for self-only coverage that exceeds 9.5 percent of household income. Although the ACA extends eligibility for assistance (based on the affordability test) to workers’ dependents, the remaining question, as noted in another earlier Brief, was whether uninsured family members of employees with access to affordable self-only employer coverage can qualify for a premium tax credit. The IRS answered that question…

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CMS and IRS release rules on exemptions to individual mandate, penalties

Posted on January 31, 2013

The Internal Revenue Service (IRS) and the Centers for Medicare and Medicaid Services (CMS) have released 2 new proposed rules related to the individual requirement to purchase health insurance (mandate). The IRS rule clarifies the requirement that nonexempt individuals maintain minimum essential coverage or make a shared responsibility payment (penalty). The CMS rule lays out specific exemptions to minimum coverage requirement, most notably that any person otherwise eligible for Medicaid under the new ACA eligibility expansion, but who resides in a state that has chosen not to expand, will not be subject to the shared responsibility payment.

Stay tuned to HealthReformGPS for a detailed analysis of these rules in the future.

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Update: Shared Responsibility for Employers Regarding Health Coverage

Posted on January 23, 2013

On January 2, 2013, the Department of Treasury issued proposed regulations (78 Fed. Reg. 218) that describe in detail the standards that will be applied in determining which employers are covered by the Affordable Care Act’s “shared responsibility” requirements covering large employers. The proposed rules, which build on earlier guidance issued over the 2011-2012 time period, interpret §4980H of the Internal Revenue Code, as added by the ACA. This section provides…

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A Summary of the Health-Related Provisions of the American Taxpayer Relief Act of 2012 (H.R. 8)

Posted on January 8, 2013

Both the Senate and the House passed H.R.8 (89-8 and 257-167, respectively), the American Taxpayer Relief Act, on January 1, 2013. President Barack Obama signed the Act into law on January 3, 2013. The measure extends Bush-era income and other tax cuts for individuals and families making up to $400,000 and $450,000 respectively. For individuals and families above this income threshold, the bill increases taxes from 35% to 39.6%. H.R. 8 also postpones…

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