Healthcare Changes Made In 2013
As you know, on June 28, the Supreme Court ruled in favor of the Affordable Assistance Act. The curve ball of the day: Don’t forget that the individual mandate, which requires all Americans to buy health insurance, was deemed unconstitutional under the trade clause but survived as a tax. This means that health reform will continue to advance at a rapid pace, although numerous questions remain – many of which will not be answered until after the November elections. Until then, the insurance industry must continue to prepare for changes and new requirements. To help you serve your customers and talk smartly about healthcare reform, here is a summary of the changes that took effect in 2013 and beyond.
Changes made in 2013
• Individuals earning $ 200,000 a year, or couples earning $ 250,000, will pay a higher Medicare payroll fee of 2.35 percent of their income, up from the current 1.45 percent. This will be of particular interest to your independent clients as they pay 100% of the payroll tax rather than sharing them with an employer. In addition, a separate 3.8% tax on unearned income, such as dividend interest, will be added in 2013. • Medical expense contributions to Flexible Spending Accounts (FSAs) will be limited to $ 2,500 annually. There is currently no limit to these accounts, which are used to buy from contact lenses to children’s devices. Given the high cost of handsets, for example, this tax provision will be an unwelcome surprise to many families. The FSA limit will also affect children with special needs whose tuition has been covered by FSA funds.
• The threshold for claiming deductions for detailed medical expenses will be increased to 10% of income from the current 7.5%. This will affect clients with the highest medical bills, potentially including those with highly deductible insurance plans.
Changes for 2014 and beyond
• Medicaid participation will expand to include low-income individuals under 65, up to 133% of the federal poverty level, or approximately $ 28,300 for a family of four. While securing more Americans is a goal of any reform effort, there are concerns about whether the nation’s primary care physicians can handle this influx of new patients.
• Employers start paying fines if they do not provide qualified health care coverage to employees.
• Individual terms begin, with fines for individuals and families who do not participate. Subsidies will be available to those living at or below 400% of the federal poverty level.
• Guaranteed emission, guaranteed renewability, modified community classification and minimum benefit standards become effective. This has already caused insurance premiums to increase.