The following is from the American Benefits Council and highlights the changes from the already passed Senate health care reform bill. Note that many effective dates have been delayed from the original date in pending legislation.
Highlights of key changes in the new proposal to Senate-passed bill include:
Employer Responsibilities:
Employers with 50 or more employees that do not provide health coverage would be assessed $2,000 for each full-time employee in its workforce.
Employers that do provide coverage, but the coverage is deemed not affordable to employees under the terms of the legislation, would also be assessed $3,000 for each full-time employee who obtains an income-based health insurance premium tax credit in an insurance exchange.
Employers that do not provide coverage would not be assessed a penalty for the first 30 full-time employees.
Employers would be permitted to have waiting periods up to 90 days without being subject to penalties.
Part-time employees would be considered solely for the purpose of determining if an employer has 50 or more employees (by adding together full-time equivalents) and are therefore subject to the employer responsibility and penalty provisions. But any penalties would be assessed only on behalf of full-time employees who work 30 or more hours per week.
Individual Responsibilities:
Modifies the penalties on individuals who do not obtain health coverage by lowering the fixed dollar penalty from $495 to $325 in 2015, and $750 to $695 in 2016. Penalties based on the percent of an individual’s income would be increased starting at 1.0 percent in 2014 to 2.5 percent by 2016. Because individuals would pay the greater of the fixed dollar penalty or the percent of income penalty, the changes in the individual penalty formula are intended to make the provisions more progressive.
No penalty would be assessed on individuals without health insurance whose income is below the filing level for income tax purposes.
Taxation of Retiree Drug Subsidies to Employers:
Retains the provisions from the House and Senate bills requiring employers to reduce their allowable deductions by the amount they receive in retiree drug subsidy payments, but further delays its effective date to 2013.
High-Cost Plan Excise Tax:
Delays the 40 percent excise tax on high-cost plans until 2018 for total health coverage costs in excess of $10,200 (single) and $27,500 for family coverage ($11,850 and $30,950 for retirees and certain employees engaged in high risk professions).
Excludes dental and vision coverage from the calculations of health costs that are subject to the tax.
Includes adjustments for age and gender in calculating health care costs that are subject to the tax.
Indexes the tax thresholds by the consumer price index (CPI) plus 1 percent in 2019, and by CPI alone in 2020 and thereafter.
Includes an automatic adjustment to the tax thresholds if actual health care costs increase more rapidly between 2010 and 2018 than had been assumed in establishing the 2018 tax thresholds.
Any coverage provided under multiemployer plans, for either single or family coverage, would be subject to the higher family coverage tax thresholds. Therefore, it would appear unlikely to ever apply to people getting single coverage in a multiemployer plan.
Medicare Hospital Insurance Tax
High-earner individuals with wages above $200,000 (single return) or $250,000 (joint return) would be subject to a 0.9 percent tax on wages in excess of the thresholds. This is only applicable to the employee portion of wages.
High-earner individuals with total taxable income above $200,000 (single return) or $250,000 (joint return) from any source would be subject to a 3.8 percent tax on their net investment income above the thresholds.
Flexible Spending Arrangements (FSAs)
Contributions to FSAs would be limited to $2,500 starting in 2013 and indexes this amount by CPI starting in 2014.
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