written by Patti Stoner

Patti Stoner head shot

Since the passage of the Affordable Care Act in 2010, there have been many changes to health insurance coverage requirements and a few minor items were effective soon after. The 2013 and 2014 effective dates for tax aspects of the Act are the most crucial to keep in mind.

Click here to read part 1.

New Medicare 3.8% Net Investment Tax
This tax is for individuals, trusts and estates. It is assessed on your investment income if it exceeds $200,000 ($250,000 joint) of your adjusted gross income. Click here to view our article on the income items that are included and excluded from this definition. The best news is it does not include:

  • capital gains from the sale of our personal residence
  • pass-through income from your dental practice partnership, LLC or S corporation
  • retirement plan distributions

Like the 0.9% Medicare tax, it is computed on your individual income tax returns and is effective 1/1/2013.

Large Employer Mandate Requiring Health Insurance for Employees
This is one of the biggest issue with the Affordable Care Act. Every section of the Act seems to have a different definition for the same phrase. This one defines an “applicable large employer” as one with at least 50 full-time (FTEs). If the applicable large employer does not offer affordable health insurance to their employees, they will be penalized one of two possible fines – $2,000 per FTE (with a 30 count exemption) or $3,000 per each FTE that buys from the Exchange and/or qualifies for a premium tax credit (federal subsidy). The wage threshold for these employees that may qualify for the premium tax credits, etc. are much higher than you might suspect. Projected for 2012, annual wages at 400% of the 2012 federal poverty level (FPL) were $44,680. Read our basics article for more details on these definitions. This is effective 1/1/2014.

Small Employers Who Don’t Offer Health Coverage
Many of you practice in small groups, so the requirement for you to provide insurance won’t apply if you are below the 50 FTE count as an employer. All details are listed in the basics article on the large employer mandate so you don’t get surprised that you do need to offer insurance.

Contact us today if you have any questions 417-881-0145.