TONY WILSON: More taxes, fees headed under Healthcare Reform

Tony Wilson

Tony Wilson

This week’s offering comes with a warning — if you forgot to take your blood pressure medication this morning, please do so before proceeding. Today, we will continue our look at just some of the $700 billion in new taxes and fees under the Patient Protection and Affordable Care Act.

In case you missed last week’s column, we addressed the issue that this was a tax despite the Obama administration arguing prior to passage that it wasn’t a tax but then arguing before the Supreme Court in the Act’s defense that, yes, in fact, it is a tax. Maybe the Administration, like Nancy Pelosi, had to have it passed to know what was in it.

Picking up where we left off with our review of “Present Law and Background Relating to the Tax-Related Provisions in the Affordable Care Act” by the Staff of the Joint Committee on Taxation, let’s talk about some more of the taxes and fees headed our way under PPACA.

While one almost needs a degree in tax law to get through “Present Law,” the Society for Human Resource Management outlines in an easier-to-follow format the Patient-Centered Outcomes Research Institute fee that is part of PPACA.

The fee is to be used to fund and promote “the use of evidence-based medicine by disseminating comparative clinical effectiveness research findings.”

The fees are to be contributed to the Patient-Centered Outcomes Research Trust Fund that will fund “comparative effectiveness research.” The research will evaluate and compare health outcomes and the clinical effectiveness, risks and benefits of two or more medical treatments and/or services. (You know — because organizations like the American Medical Association doesn’t have this type of information already that it is constantly updating.)

The PCORI fee is imposed on plan sponsors and issuers of individual and group policies for policy or plan years ending after Sept. 30, 2012. Issuers and employers sponsoring certain group health plans must pay a fee of $1 per covered life per year. The fee adjusts to $2 per covered life for policy or plan years ending Oct. 1, 2013 through Sept. 30, 2014.

For policy or plan years ending after Sept. 30, 2014, the dollar amount will be adjusted by the Secretary of Treasury based on the percentage increase in the projected per capita amount of national health expenditures.

While insurance issuers and plan sponsors are responsible for paying the fee, ultimately the costs will get passed down to — ­­wait for it — you and me.

The problem with this and many of the other fees and taxes under PPACA is before long the dollar here and dollar there starts adding up for individuals and families.

Couple that with the fact that all of us are getting hit with another dollar or two (or five or 10) at the gas pump, in the electric and water bills and before you know, it these little bumps turn into major costs for all of us.

Didn’t the administration promise costs would go down?

Just a few additional taxes under PPACA…

Beginning this year, certain taxpayers are paying an additional 0.9 percent Medicare tax based on their earnings.

Mom and Dad looking to sell the family home to downsize and use the extra money in their golden years? They may have to pay an additional 3.8 percent investment tax, depending on their investment income.

Did you know under PPACA the threshold amount for the individual itemized deduction for medical expenses increased to 10 percent of your adjusted gross income, up from 7.5 percent?

Prior to PPACA, the penalty for non-qualified distributions on Health Savings Accounts (HSAs) was 10 percent while the penalty was 15 percent for those with Archer Medical Savings Account. With PPACA, the penalty has increased to 20 percent for both types of accounts.

Heard about the new 2.3 percent tax on medical devices? Open the wallet a little wider, please, we think you have a few pennies left. We can’t let you keep those.

Believe it or not, the list of taxes goes on. But on a bright note, each document I reviewed on the IRS website related to PPACA stated in the opening pages that the collection of information is subject to the Paperwork Reduction Act of 1995. That’s good, because without that Act there’s no telling how long some of the 100-plus page explanation documents could have stretched.

We may not be saving money through reform, but hopefully the Paperwork Reduction Act is savings some trees. Which is good since we all may be moving to the woods and living off the land if the government keeps this up.

Questions or comments? Feel free to email me at twilson@nfp.com.

Tony L. Wilson is a principal with NUVISION Financial Corporation based in Conyers. NUVISION is a subsidiary of National Financial Partners Corp. (NFP), which provides benefits solutions for companies.