“America’s Affordable Health Choices” Act Summary

“America’s Affordable Health Choices” Act Summary
Phase-In	Tax Provisions	Healthcare Provisions
2010	Certain small businesses with less than 10 employees get 35% credit for cost of providing employee health benefits	Insurance companies cannot deny children coverage for pre-existing conditions   Children can remain on parents’ plan until age 26   Medicare Part D recipients entering “donut hole” get $250 rebate   Plans can no longer set lifetime limits on coverage
2011	Employers must report value of health benefits on Form W2.   Penalty tax for Health Savings Account distributions not used for health care expenses doubles from 10% to 20%.	Medicare Part D recipients entering “donut hole” get 50% discount on certain prescriptions
2013	7.5% floor for deducting medical and dental expenses climbs to 10% (for taxpayers age 65 or older, floor stays at 7.5% until 2016).   Healthcare flexible spending account contributions are capped at $2,500 per year.   Hike Medicare tax to 3.8% of earned income above $200,000 (individuals) or $250,000 (joint filers)   Impose Medicare tax of 3.8% on “investment income” for filers with adjusted gross income above $200,000 (individuals) or $250,000 (joint filers)	Limit deduction for health insurer’s executive compensation to $500,000
2014	Businesses with >50 employees must offer health coverage or pay penalty of $2,000/employee   Most individuals must buy coverage or face penalty up to $695 or 2.5% of income	Insurance companies cannot deny adults coverage for pre-existing conditions   Plans can no longer set annual limits on coverage   Medicaid expands to cover all Americans with income up to 133% of poverty line   State-run insurance “exchanges” begin offering coverage to individuals and small businesses
2018	Impose excise tax on “Cadillac plans” costing above $10,200 (singles) or $27,500 (families)