About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 1 (January 26, 2018)

handle is hein.crs/govcezp0001 and id is 1 raw text is: FF. ' riE -E-'.r h ,q . i Updated January 26, 2018 Taxes and Fees Enacted as Part of the Affordable Care Act The Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended by P.L. 111-152) contains a number of tax provisions that serve different purposes. Some of the more well-known provisions, such as the individual mandate and employer penalty, have revenue and budgetary effects but are primarily intended to encourage health insurance coverage. The focus of this product is a number of other taxes and fees enacted as part of the ACA that primarily serve to raise revenue. Tax on ,,h ,, r,,,, Cc, r,,age Effective 2022, a 40% excise tax, also referred to as the Cadillac tax, is to be assessed on the aggregate cost of employer-sponsored health coverage that exceeds a dollar threshold. The thresholds are adjusted for eligible retirees, workers in certain high-risk professions, and plans whose demographics differ significantly from the national workforce. The thresholds are also adjusted for inflation. Effective 2013, the ACA imposes two taxes on married couples filing jointly with modified adjusted gross income (MAGI) exceeding $250,000 ($200,000 for single, non- married filers). These thresholds are not adjusted for inflation. An additional Medicare hospital insurance tax of 0.9% is imposed on employees who have wages in excess of the threshold. (For all wage income, employees and employers are each subject to Medicare hospital insurance payroll tax of 1.45%, or 2.9% total.) In addition, a 3.8% net investment income tax (NIIT) is imposed on individuals on the lesser of either (a) their net investment income or (b) the amount by which their MAGI exceeds the threshold. Net investment income includes income from certain sources, such as interest, dividends, annuities, passive business income, and capital gains. , evk. - ,-Luic :- T&, Effective 2013, the ACA imposes a 2.3% excise tax on the manufacturer's price of certain medical devices intended for consumption in the United States. Imports are taxed, but exports, certain products defined in statute, and products that are directly available for retail sale to consumers are exempt from the tax. The tax was in effect through 2015, but the Consolidated Appropriations Act, 2016 (CAA; P.L. 114-113) temporarily suspended the tax for 2016 and 2017, and P.L. 115-120 extended the suspension for another two years (2018 and 2019). Effective 2014, the ACA imposes an annual fee on certain health insurance providers based on their market share. Market share is calculated based on an insurance carrier's share of premiums written in the previous year. The fee on the entire industry was $8 billion in 2014 and was set to increase gradually to $14.3 billion in 2018. The fee is indexed to the rate of insurance premium growth in years after 2018. The CAA temporarily suspended the fee for 2017. The fee is in effect for 2018 and is still set to collect $14.3 billion. P.L. 115-120 suspends the fee for 2019. Effective 2011, the ACA imposes an annual fee on certain firms, manufacturers, and importers of branded pharmaceuticals based on their market share of all branded pharmaceuticals sales (excluding orphan drugs). The fee levied on the industry peaks at $4.1 billion in 2018 and remains constant at $2.8 billion in 2019 and beyond. Firms with less than $5 million in annual branded pharmaceuticals sales are exempt from paying the fee, and the amount of sales taken into account for the purposes of imposing the fee is reduced by certain percentages (between 90% and 25%) for firms that have between $5 million and $400 million in annual branded pharmaceutical sales. nd o r Tan rin S rlics-s Tax Effective 2010, the ACA imposes a 10% excise tax on the price of indoor tanning services provided by certain businesses. The tax does not apply to spray-on tanning services, topical creams and lotions, or phototherapy services performed by a licensed medical professional. There is also an exemption for qualified physical fitness facilities, such as gyms or fitness clubs, which offer tanning as an incidental service to members. Collections from most of these provisions are directed to the general fund of the Treasury, with the exceptions being the Medicare payroll surtax (which is dedicated to the Medicare Part A Trust Fund) and the branded pharmaceutical fee (which is dedicated to the Medicare Part B trust fund). begkdtkkun, m' * 1'cmr On January 22, 2018, the President signed P.L. 115-120, which provided continuing appropriations for FY2018 through February 8, 2018. The legislation also enacted a two-year moratorium on the medical device tax (2018 and 2019) and a one-year moratorium on the health insurer providers fee (2018) and further delayed the implementation of the Cadillac tax for two years (from 2020 to 2022). The $31.3 billion revenue loss associated with these provisions is shown in Table 1. Congress could debate further delay or repeal of certain ACA taxes and fees. Table 2 shows revenue loss estimates from the American Health Care Reform Act (AHCA; H.R. 1628), passed by the House on May 4, 2017. Although revenue loss estimates for AHCA predated the policy changes in P.L. 115-120, the scores could be informative p\w -- , gn'a', goo mppm qq\ a , q 'S I 11LULANJILiN,

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most