American Health Care Act: What Does it Mean
The Committee on Ways and Means released proposed legislation titled the American Health Care Act in an effort to provide anticipated changes to the present Health Care Law. The legislation includes recommendations to repeal many taxes and penalties under the Affordable Care Act (such as health insurer tax, tanning bed tax, employer mandate penalty under IRC 4980H, individual mandate penalty, and the Cadillac Tax to name a few).
Additionally, the following changes are highlights from the proposed legislation:
Repeal of premium tax credits, as well as small business tax credit beginning in 2020
Repeal of the limit on FSA contributions beginning for years after December 2017
Increase in HSA contribution limits to align with the maximum out of pocket costs and deductible amounts for High Deductible Health Plans
Repeal of the additional 0.9% Medicare tax increase under ACA, beginning in 2018
Creation of an advanceable, refundable tax credit for purchase of medical insurance when no employer or government insurance is available in amounts as follows:
Under age 30: $2,000
Between 30 and 39: $2,500
Between 40 and 49: $3,000
Between 50 and 59: $3,500
Over age 60: $4,000
The legislation is still in proposed form at this time. Additionally, none of the proposed changes take place immediately, so employers should not make any changes to their current benefit programs in anticipation of this legislation.
To view the complete text of the Committee report, click here.