After more than 50 years of debate, deliberation and (more often than not) discord, there is new health care legislation.
The Patient Protection and Affordable Care Act - aka, the 'Patient Protection Act' - was signed into law in March.
The big goals behind this massive legislation are to slow down the escalating costs of health care for everyone and bring health care coverage to more than 32 million people who are currently uninsured.
Some of the key concepts of the reform include: • extending insurance coverage to adults and children with pre-existing conditions, starting in 2014; • extending employer-provided health coverage for adult children up to age 26; • the creation of State Exchanges/Health Insurance Marketplaces where individuals can compare costs and benefits and purchase insurance; • tax credits for individuals and small businesses to help purchase/offset the costs of insurance; • penalty tax for businesses (with at least 50 employees) who do not offer minimum essential insurance coverage; and • a penalty for individuals who do not maintain insurance coverage.
Starting in 2014, the penalty for individuals who do not maintain insurance coverage is a flat, nondeductible cost of $95 per person.
That dollar amount jumps to $325 in 2015, $695 in 2016 and is indexed for inflation thereafter.
There is also a Medicare payroll tax for higher income taxpayers starting in 2013.
This includes an additional 0.
9 percent added onto the employee portion of the Medicare payroll tax on earned income in excess of $200,000 for individuals and $250,000 for families AND an additional 3.
8% tax on investment income (or the lower of your investment income or the amount by which your AGI exceeds $200k for individuals or $250k for families.
) The passage of the Patient Protection Act is historic, but the conversation about health care - its costs to individuals and its impact on businesses and the economy - is far from over.
Between the recession, the stock market and the health care debate, there can be no stronger case made for the importance of personal fiscal responsibility and a rock solid financial foundation.