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Health Insurance Changes - Federal


  • Dependent children will be covered to age 26
  • Individuals who are not able to purchase coverage due to health issues/conditions will have access through high risk pools (this provision will expire in 2014)
  • Children cannot be excluded due to pre-existing conditions
  • 2011

  • Over-the-counter medicines or drugs can not be reimbursed under an FSA plan unless a prescription is obtained (this does not affect Insulin, even if purchased without a prescription, or other health care expenses such as medical devices, eye glasses, contact lenses, co-pays and deductibles)
  • Employers must disclose value of health plans to employees on W2 forms
  • 20% tax on non-qualified Health Savings Accounts and Medical Savings Accounts distributions (from 10%)
  • Insurers must spend 80 to 85% of premium dollars on health care (depending on employer size)
  • 2013

  • Flexible Spending Account contributions max $2,500; indexed to CPU
  • Threshold for medical expense tax deduction increases from 7.5% to 10% for all but the elderly 2013 (who retain the 7.5% level through 2016)
  • Medicare payroll tax increase from 1.45% to 2.35% for individuals earning $200k and families earning $250k
  • 2014

  • Exchanges available (state based) for eligible individuals and small employers - coverage offered through exchanges will need to meet certain requirements
  • Credits available to individuals & families up to 400% of the Federal Poverty Level. Penalties for individuals not having insurance coverage: $95/person, $285/family or 1% of income
  • Employers with 50+ employees who do not offer coverage will be required to pay a penalty of the lesser of:
    - $3,000 per employee receiving federal premium assistance; or
    - $2,000 annual fee per employee for each full-time employee (minus the first 30 employees)
  • 2015

  • Penalties for individuals not having insurance coverage - $325/person, $975/family or 2% of income
  • 2016

  • Penalties for individuals not having insurance coverage can reach 2.5% of income
  • 2018

  • 40% excise tax on premiums in excess of $10,200/$27,500
  • Dental and vision plans are excluded (as are disability, life and post-tax voluntary benefits)