2013 ACA Changes

Here is the FEHBlog's aummary of Affordable Care Act changes that take effect in 2013 a/k/a Tuesday, many of which have been discussed on the blog earlier this year:

·       Pursuant to ACA § 1104, not later than December 31, 2013, a health plan must file a statement with the HHS Secretary certifying that the plan’s data and information systems comply with any applicable HIPAA standards and associated operating rules for electronic funds transfers, eligibility for a health plan, health claim status, and health care payment and remittance advice.

·       ACA § 9511 requires insured and self-insured health plans generally to pay an annual fee of $1 per member in 2013, $2 per member in 2014, and $2 (plus medical inflation) in 2015 through 2019 to a patient centered outcomes research trust fund (the PCORI) created by ACA § 6301. The fee will not be collected in 2020 and subsequent years under current law. Here is a link to a helpful American Benefits Council webinar on the PCORI fee and the much larger ($63 per member per year) transitional reinsurance fund contribution obligation which comes into play in 2014 (first payable in 2015). Here is a link to an American Benefits Council research paper on the transitional reinsurance fund which is worth a look as it identifies important differences between that contribution obligation and the PCORI fee. 

·       ACA § 9009 charges a new excise tax of 2.3% on the sale of medical devices by manufacturers, producers, or importers. This provision exempts eyeglasses, contact lenses, hearing aids, and any device of a type that is generally purchased by the public at retail for individual use. Here's a link to the IRS's FAQs on that new tax. Here's a link to a December 28 Boston Globe article about efforts to delay or repeal this tax. 

·       ACA § 9005 caps annual contributions to health care flexible spending accounts at $2,500 indexed annually to the CPI-U. Before 2013, there has been no statutory cap, and the FSAFeds cap was set at $5,000.

·       ACA § 9013 increases the threshold for the itemized deduction for unreimbursed medical expenses from 7.5% of adjusted gross income to 10% of adjusted gross income for regular tax purposes; however, it waives the increase for individuals age 65 and older for tax years 2013 through 2016.

·       ACA § 9015 increases the Medicare Part A (hospital insurance) tax rate on wages by 0.9% (from 1.45% to 2.35%) on earnings over $200,000 for individual taxpayers and $250,000 for married couples filing jointly and imposes a 3.8% tax on unearned income for these higher-income taxpayers. These thresholds are not indexed for inflation. IRS FAQs on the Medicare payroll tax here. IRS FAQs on the 3.8% net investment income tax here.