The Daily Deduction

Moving Forward: Healthcare Reform and Your Taxes

1-9-2014 StethoscopeFrom the beginning, the proposed changes to insurance and the initial release of the Affordable Care Act have been hotly contested. There have been several changes to healthcare reform and taxes. Keeping abreast of changes, updates, and how they affect consumer taxes can get overwhelming but the healthcare reform and its affects can be understood with a little information.

Updates to the Affordable Care Act

President Obama announced a plan to let individuals keep their insurance for another year. According to the plan, insurance companies are allowed to renew policies for individual and small group plans that would have otherwise been canceled. This provision is for policies that did not meet the minimum standards of the Affordable Care Act. The policies canceled must have been in effect on October 1, 2013 and the insured must be informed on the changes and options available to them.

The Department of Health and Human Services issued a hardship exemption to go along with the extension of open enrollment for obtaining a health insurance plan. The extension has changed from December 31, 2013 to March 31, 2014. This healthcare reform and taxes change will affect many individual.

Final regulations have been issued on the Mental Health Parity and Addiction Equity Act of 2008. They will take effect in plans on or after July 1, 2014. These regulations state that financial requirements such as co-pays and deductibles and treatment limitations should be more equivalent to limits imposed for medical and surgical benefits. This does not require the issuance of these benefits, but it is only applicable if these benefits are already provided by the issuer.

Although, according to President Obama, those individuals that are insured and want to keep their plan should be able to do so with the same coverage and gain even more coverage with the Affordable Care Act, this may not actually be so due to the effects of the healthcare reform and taxes shifting.

How These Updates Affect Consumer Taxes

Allowing individuals and small groups to keep their plans will cause an increase to the issuers, who will then in turn pass those increases on to the consumers. The healthcare reform and taxes will continue to change as updates continue. More updates for the extension will happen as it is determined whether or not the plans will continue to be extended based on a cost analysis of how it affects the system.

The hardship exemption extended by the Department of Health and Human Services was put in place due to the extension of open enrollment. Without the hardship in place, individuals would have been subject to the shared responsibility payment when filing their 2014 tax returns due to healthcare reform and taxes.

The increase in coverage and change in limitations imposed on these types of services will cause an increase in the coverage amount for those plans that have these benefits in place. This is a substantial change in healthcare reform and taxes will likely increase.

As it relates, to insured employees keeping employer-provided benefits, some benefits may actually be scaled back as employers deal with the Affordable Care Act tax known as the Cadillac Tax. It won’t take effect until 2018, but insurance packages are already being influenced by this increase in cost. Employers are working to keep the cost of their plans under the Cadillac Tax.

The updates to the healthcare reform and taxes have caused many changes and are a main concern for many. The Affordable Care Act and any updates impact the insured as well as the uninsured, as individuals scramble to get acceptable coverage.

Posted To: The Daily Deduction By: Lauryn on 1/9/2014 11:05:13 AM
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