LISA P. GONZALEZ, CPA, PLLC Business & Tax Specialists
LISA P. GONZALEZ, CPA, PLLC Business & Tax Specialists   

Provisions of the Patient Protection and Affordable Care Act

Beginning in 2011: 

  1. Over the counter drugs and medications will no longer be reimbursable from Health Savings Accounts, HSA, without a prescription from a doctor
  2. The additional tax for HSA withdrawals prior to age 65 that are used for purposes other than qualified medical expenses increases from 10% to 20%
  3. The additional tax for Archer MSA withdrawals prior to age 65 that are used for purposes other than qualified medical expenses increases from 15% to 20%
  4. An annual, non-deductible fee will be imposed on non-brand name pharmaceutical manufacturing companies

 Beginning in 2012: 

  1. The requirement for businesses to provide a 1099 for payments made to any Corporation they paid over $600 to was repealed by Congress
  2. Employers will be required to report the cost of health insurance provided to their employees on their W-2 forms.

Beginning in 2013: 

  1. Health Flexible Spending Arrangement reimbursements will be limited to $2,500 per year, no matter if for a single or a family for incurred medical expenses
  2. The threshold for claiming an itemized deduction for medical expenses increases from 7.5% to 10%, thus reducing the amount you can deduct for medical expenses on your tax return.
  3. Wages over $200,000 ($250,000 for joint filers) or self-employment income will be assessed a hospital insurance tax of 0.9% to be withheld by Employers or paid by the self employed
  4. A 3.8% tax will be imposed on net investment income, such as interest, dividends, annuities, royalties, rents, and the sale of a principal residence, for taxpayers earning over $200,000 ($250,000 for joint filers)
  5. A 2.3% excise tax will be imposed on manufacturers of medical devices
  6. Health insurance companies will no longer be able to deduct compensation in excess of $500,000 per taxable year paid to their Employees

Beginning in 2014:

  1. All US Citizens and Legal Residents will be required to maintain minimum essential health insurance coverage
  2. Failure to maintain minimum essential coverage results in a penalty of the greater of $95 or 1% of your 2014 income, $325 or 2% of your 2015 income and $695 or 2.5% of your 2016 income
  3. Employers with 50 or more full time employees will be assessed a penalty if they do not offer minimum essential coverage to all full time employees and their dependents for any month
  4. The penalty on employer is $166.67 multiplied by the number of full-time employees (not including the first 30 workers)
  5. If any employees receive a premium tax credit or cost-sharing reduction for the purchase of health insurance through a Government Exchange, the employer will have to pay a penalty of $3,000 per employee for those so covered.
  6. Employers with 50 or more employees must file a report with the Secretary of the Treasury on health insurance coverage provided to their full time employees or a penalty will be imposed
  7. All Employers with more than 200 full time employees must automatically enroll new employees in a health care plan and provide notice of the opportunity to opt out of such coverage
  8. Employers who provide minimum essential coverage to their employees will be required to file informational returns providing identifying information of covered individuals and their family members and the dates of coverage
  9. An annual, non-deductible fee of $8 billion will be imposed on the health insurance sector and will increase each year. The fee does not apply to Non-Profits, Employers or Governmental Entities.

Beginning in 2018: A 40% non-deductible excise tax will be imposed on Employers for high-cost employer-sponsored health insurance coverage for any employee whose annual premium is greater than $10,200 for single coverage and $27,500 for family coverage. 


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Lisa P. Gonzalez, CPA, PLLC

1322 Space Park Dr

Suite C224

Houston, TX 77058


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