Summary of the Patient Protection and Affordable Care Act of 2010

Insurance Reform Impact 2013:

Create the CO-OP (Consumer Operatedand Oriented Plan) program to foster creation of non-profit, member-run healthinsurance companies.

Limit annual contributions to healthFSAs to $2,500 per year, indexed for inflation in subsequent years.

Adopt a single set of operating rulesfor eligibility, enrollment and claims processing.

Require disclosure of financialrelationships between all health entities.

Medicare Changes

Begin phasing in federal subsidies for brand-name prescriptions filled in the MedicarePart D coverage gap.

Tax Changes 2013

Increase the itemized deductionthreshold for unreimbursed medical expenses from 7.5% of adjusted gross incometo 10% of adjusted gross income.

The itemized deduction thresholdincrease is waived for individuals age 65 and older for tax years 2013 through2016.

Increase the Medicare Part A payrolltax rate on wages by 0.9% (from 1.45% to 2.35%) on earnings over $200,000 forindividual taxpayers and over $250,000 for married taxpayers filing jointly;applies only to the employee portion of the tax.

Impose an unearned income 3.8% Medicare contribution on net investment income received by higher-income taxpayers (over $200,000 individual/$250,000 married filing jointly). Net investment income includes interest, dividends, rents, royalties, gain from disposing of property, andincome earned from a trade or business that is a passive activity.Self-employed individuals, as well as estates and trusts, will also be liablefor this tax. Distributions from qualified retirement plans, however, will beexempt from paying the additional tax.

Eliminate the tax deduction for employers who receive Medicare Part D retiree drug subsidy payments.

The Patient Protection Act - Impact on Small Employers

2010 through 2013: Eligible small employers may qualify for a tax credit of up to 35% of their contributions toward employees' health insurance premiums.