Obamacare Tax Increases we will all feel:
In 2014: Fine for no Health Insurance $95 or 1% of your Adjusted Gross Income (AGI) whichever is higher.
In 2015: The no insurance fine goes up to at least a minimum of $325 or 2% of (AGI), whichever is higher.
In 2016: The no insurance fine goes up to at least a minimum of $695 or 2.5% of (AGI), whichever is higher.
2017 forward – the fines index for inflation. Even a $695 fine will not compel the younger subscribers that Obamacare is counting on to subsidize the older subscribers on the exchanges. They will simply pay the fine.
Note – illegal aliens are exempt from the fines.
Threshold for writing off medical expenses, now 10% of AGI, used to be 7.5%. This is a tax increase on people who had been getting that write-off.
Deferrals in to Pre-Tax Health Savings Accounts cut to $2500 limit. This is a tax increase on the middle class as this effectively cuts this write-off in half.
In 2014: Fine for no Health Insurance $95 or 1% of your Adjusted Gross Income (AGI) whichever is higher.
In 2015: The no insurance fine goes up to at least a minimum of $325 or 2% of (AGI), whichever is higher.
In 2016: The no insurance fine goes up to at least a minimum of $695 or 2.5% of (AGI), whichever is higher.
2017 forward – the fines index for inflation. Even a $695 fine will not compel the younger subscribers that Obamacare is counting on to subsidize the older subscribers on the exchanges. They will simply pay the fine.
Note – illegal aliens are exempt from the fines.
Threshold for writing off medical expenses, now 10% of AGI, used to be 7.5%. This is a tax increase on people who had been getting that write-off.
Deferrals in to Pre-Tax Health Savings Accounts cut to $2500 limit. This is a tax increase on the middle class as this effectively cuts this write-off in half.
Tax for using HSA/MSA on non-allowed items (like over the counter meds) doubles to 20%
Medicare Taxes on those earning over $200k or $250k on Married Couples, (note the $150k marriage penalty) increase by 0.9%.
An additional tax of 3.8% (in addition to cap gains or income tax) on investment income for those with MAGI over 200K or $250K on Married Couples (note the marriage penalty again) – note that trusts, estates and the self-employed are all subject to this tax.
10% Excise Tax on Tanning Bed visits
In 2011, direct taxes on Drug Companies Started. (These have likely been passed on in higher drug costs)
2.3% Excise Tax on Durable Medical Equipment (A tax on Seniors and the Disabled)
There are four taxes bulleted below that add up to 3.88% and all are slated to go up. These will be charged starting in starting in 2014 as a separate line-item on people’s insurance bills.
- Health Insurer Tax – 2.3%
- Transitional Reinsurance Tax – 1.3%
- Exchange Tax - .2%
- Risk Adjustment Tax - .02%
In addition – all insurance must cover pregnancy, abortions, contraception and sex-change operations (at a cost of 500,000 per) regardless of age or sex of policyholder.
100,000 auditors have been hired by the IRS to enforce compliance.
The Department of Labor is systematically auditing and fining businesses all over America for ERISA violations. These audits apply to businesses of all sizes - none are exempt.
Fines for not having health insurance apply to businesses of all sizes as well.
Factors that will drive premium costs much higher:
ACA limits plan deductibles to no more than $2,000 per individual. This is the single most common reason for people getting cancellation notices on their individual plans.
ACA limits plan rates for 64 year olds to being no more than 3x that of an 18 year old. This provision is the major cause of the high rates for 18-40 year olds on the new “exchange” plans and any other plans.
In addition, there is no longer a “Family” rate in ACA. ACA mandates a charge per child. So, large families will get substantial rate increases. (The assumption is that they would qualify for premium welfare).
ACA mandates rates change every year based on age as opposed to the 5 or 10 year “age bands” that used to exist.
Previous California Law only allowed for 7 rating areas. ACA has changed that to at least 20. This means that even moving 1 mile can have an effect on your rates.
The last tax is the “Cadillac Tax” – this is a 40% tax, indexed for inflation on health plans with a cost of over $10,200 a year on an individual and $27,500 for a family. Given the rate increases of the ACA, this is not far-fetched to see coming.
Beware – if you sign up for an exchange health plan with a premium welfare subsidy and your income goes up… you will lose the subsidy retroactively. This is a disincentive for working that was written in to the ACA. Many will find this out the hard way on their future tax returns.
When I am not your CRA Sgt. At Arms, I have a day job. (Hint: it’s really close to this Obamacare garbage)
Copyright © 2013 Sargent-At-Arms, CRA, All rights reserved.
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Please feel free to forward this and use this information as you see fit.
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