obamacare facts
ObamaCare Tax: Full List of ObamaCare Taxes
How ObamaCare Taxes Affect You: Tax Hikes, Breaks and Credits
Here's a full list of ObamaCare Taxes. The 21 new ObamaCare tax hikes and breaks impact us all, but which ObamaCare taxes will you actually pay? Find out how how the new taxes in Obamacare, tax breaks and tax credits will affect you, your family and your business. Below is a full list of the health care taxes found in President Obama's tax plan and how they will effect your tax returns for 2013 and beyond.
Before we get into the details about the new ObamaCare taxes, let's discuss a quick bottom line of what the Obama's new tax plan really means to Americans.
Obamacare TaxesThe Bottom Line on the ObamaCare Tax Plan
The ObamaCare taxes boil down to this: for 98% of Americans the percentage of income paid in taxes won't change much if at all.
The ObamaCare tax plan aims to reduce the deficit, put money back into the economy and creates jobs. In fact ObamaCare technically provides the greatest middle class tax cut in healthcare in history (this is primarily due to Federally subsidised premium tax credits for those under 400% of the Federal Poverty Level and small businesses specifically. Tax credits are a form of cost assistance toward premiums of health insurance purchased on the "health insurance marketplace". Tax Credits are deducted from your premium by your health insurance provider and are adjusted on your Gross Taxable Income).
ObamaCare Taxes on The Average American
Under the new ObamaCare taxes, the only tax that most Americans will pay is penalty for not purchasing insurance if one can afford it (explained below). However, taxes affecting employers and the health care industry may have an indirect impact on some individuals, specifically employees of large firms affected by the tax hikes. Other taxes such as a 10% tanning bed tax, taxes on drug companies and medical devices and taxes on health insurance companies selling insurance on and off the exchange may affect the amount of money we pay for some goods and services, but will not have a significant impact on our daily lives.
Will I pay More Taxes and High Premiums Because of ObamaCare?
Although we know most of the tax increases in ObamaCare, the price of insurance premiums are still up in the air. Until the Health Insurance Exchanges open up on October 1st 2013 it's hard to know exactly what premiums will be. As a rule of thumb those who make less will pay less and those who make more or buy high-end plans may pay more compared to their current insurances. Taxes work on a sliding scale as well, meaning those in higher tax brackets may see higher taxes.
Please be aware that if your insurance premiums are raising you shouldn't be blaming ObamaCare entirely. One of the best things ObamaCare does is offer protections against health insurance companies raising premiums for profit called the rate review provision, a measure to provide rebates if companies don't spend 80% of their funds on health care called the 80/20 rule and additional protections like a quick appeal process. Additional protections don't go into effect until 2014 in most states.
Low-to-middle income Americans are projected to save an average of 60% using credits and out-of-pocket subsidies on the ObamaCare Health Insurance Marketplace ensuring that many of those those below the 400% Federal Poverty Level will see a significant decrease in the cost of insurance.
Please note that some insurance companies are raising costs to capitalize now and may be able to "grandfather you into higher rates" before it becomes illegal to do so. Find out more about ObamaCare Health Insurance Premiums.
ObamaCare Taxes: Personal Tax Breaks
Many Americans and their families will receive tax breaks, in the form of Premium tax credits, when purchasing health insurance on the Online Health Insurance Marketplaces, also known as Exchanges. The tax breaks help to ensure that all Americans have access to affordable quality health care.
Americans can't pay more than 12% of their income or less than 1.5% in 2014 on the health insurance exchanges. The amount you pay is on a sliding scale based on your income. Use the chart below to get an idea of what you and your family may pay for insurance purchased through the exchanges. Make sure to check out our Health Insurance Exchange Guide for more detailed information on Premium Tax Credits.
Use our 2014 FPL Chart to Determine if you are above the poverty level to get a better idea of what taxes you will pay.
Household Size
100%
133%
150%
200%
300%
400%
1
$11,170
$14,856
$16,755
$22,340
$33,510
$44,680
2
15,130
20,123
22,695
30,260
45,390
60,520
3
19,090
25,390
28,635
38,180
57,270
76,360
4
23,050
30,657
34,575
46,100
69,150
92,200
5
27,010
35,923
40,515
54,020
81,030
108,040
6
30,970
41,190
46,455
61,940
92,910
123,880
7
34,930
46,457
52,395
69,860
104,790
139,720
8
38,890
51,724
58,335
77,780
116,670
155,560
For each additional person, add
$3,960
$5,267
$5,940
$7,920
$11,880
$15,840
Health Insurance Premiums and Cost Sharing under PPACA for Average Family of 4 For "Silver Plan"
Income % of federal poverty level
Premium Cap as a Share of Income
Income $ (family of 4)
Max Annual Out-of-Pocket Premium
Premium Savings
Additional Cost-Sharing Subsidy
133% 3% of income $31,900 $992 $10,345 $5,040
150% 4% of income $33,075 $1,323 $9,918 $5,040
200% 6.3% of income $44,100 $2,778 $8,366 $4,000
250% 8.05% of income $55,125 $4,438 $6,597 $1,930
300% 9.5% of income $66,150 $6,284 $4,628 $1,480
350% 9.5% of income $77,175 $7,332 $3,512 $1,480
400% 9.5% of income $88,200 $8,379 $2,395 $1,480
In 2016, the FPL is projected to equal about $11,800 for a single person and about $24,000 for family of four. Use the Kaiser ObamaCare Cost Calculator for more information. DHHS and CBO estimate the average annual premium cost in 2014 to be $11,328 for family of 4 without the reform. Source: Wikipedia
ObamaCare Tax Rebates
Insurers will have to provide rebates to consumers if they spend less than 80 to 85% of premium dollars on medical care. See our page on ObamaCare Health Insurance Regulations.
ObamaCare Income Tax Penalty For Not Having Insurance "Individual Mandate"
Starting in 2014, most people will have to have insurance or pay a "penalty deducted from your taxable income". For individuals, penalty starts at $95 a year, or up to 1% of income, whichever is greater, and rise to $695, or 2.5% of income, by 2016.
For families the tax will be $2,085 or 2.5% percent of household income, whichever is greater. The requirement can be waived for several reasons, including financial hardship or religious beliefs. If the tax would exceed 8% of your income you are exempt, also some religious groups are exempt. That tax cannot exceed the cost of a "bronze plan" bought on the exchange.
While some states, including Alabama, Wyoming and Montana, have passed laws to block the requirement to carry health insurance, those provisions do not override federal law. Get more information on the ObamaCare tax penalty
ObamaCare Home Sales Tax / ObamaCare Real Estate Tax Increase
ObamaCare increases taxes on unearned income by 3.8%. This also applies to home sales over a certain amount. The 3.8% homes sales tax typically doesn't apply to your primary residence. It also doesn't usually apply to homes you have owned for over 5 years or on profits of less than $300k.
In short the ObamaCare home sales tax isn't something that most of us will pay, it is a tax is aimed at people who won't be crippled by the tax, not at the average American buying and selling their primary residence.
What Increases Do the ObamaCare Taxes Include for The $200k/$250k Earners?
ObamaCare Medicare Part A Payroll Tax
Starting in 2013, ObamaCare taxes individuals with earnings above $200,000 and married couples making more than $250,000. This tax is an increase to the Medicare part A payroll tax. It's an increase of 2.35%, up from the current 1.45% ( a .9% Medicare payroll tax hike), on adjusted income over the threshold.
ObamaCare Unearned Income Tax
This group will also pay a 3.8% unearned income tax on interest, dividends, annuities, royalties, rents, and gains on the sale of investments over the threshold.
Taxable income under the $200/$250k threshold is subject to the same benefits and tax cuts as those who make under the threshold.
ObamaCare Employer / Employee Taxes
Medicare part A Tax Hike for Employers and Employees
The ObamaCare small business Medicare tax hike is a .9% increase on the current Medicare part A tax. Small businesses making under $250k in taxable profit don't have to pay this ObamaCare small business tax increase. Employees with earnings under $200 / $250k don't have to pay this either.
The Employer Mandate
Unless you own a company that has over 50 employees, you do not have to insure your employees. If you exceed these amounts, you have to either insure your employees or pay a penalty. The penalty is $2000 per employee and $3000 if they use tax credits to purchase insurance on the exchange.
Employers with under 25 full time employees, whose average income doesn't exceed $50k, can apply for tax credits of up to 30% for insuring their employees.
In other words, the ObamaCare taxes help small business employees and employers by offering them better health insurance and bigger tax breaks.
Please be aware that if you have employer-based health insurance there are a number of factors that could affect you, from employers lowering the quality of high costs health care plans by 2018 to avoid the "Cadillac" tax and employers cutting hours to part-time to avoid the "employer mandate".
Other ObamaCare Taxes on Big Business
Aside from having to adhere to the "employer mandate" ObamaCare also imposes taxes and fees that are unique to big business. ObamaCare taxes some medical device manufactures, drug companies and health insurance companies. Beginning in 2013, medical device manufacturers and importers must pay a 2.3% tax on the sale of a taxable medical device. This raises $29 billion over a 10 years. However, many states are asking to delay the medical device excise tax to protect jobs in states that produce the devices. An annual fee for health insurers is expected to raise more than $100 billion over 10 years, while a fee for brand name drugs will bring in another $34 billion.
ObamaCare "Cadillac" Tax
Starting in 2018, the new health care law imposes a 40% excise tax on the portion of most employer-sponsored health coverage (this excludes dental and vision) that exceed $10,200 a year and $27,500 for families. The tax has been dubbed a "Cadillac" tax because it hits only high-end "gold", "platinum" and high-end health care plans not purchased on the exchange. The tax raises over $150 billion over the next 10 years.
How New ObamaCare Taxes on Top Earners Affect Americans
The above fees may be passed onto some consumers in the form of higher premiums. However, the cutting of waste and many additional factors, including tax breaks, tax credits, help with up-front payments and the expansion of Medicaid and Medicare will help drive down the cost of premiums.
Full List of All Taxes in ObamaCare / All Taxes in the Affordable Care Act
The following list of new ObamaCare taxes collectively raise about $700 billion over the next ten years. While most ObamaCare taxes won't affect the Average American there are some that will. Here is a complete list of new fees and taxes contained within ObamaCare:
ObamaCare Taxes That Most Likely Won't Effect the 98%
• 2.3% Tax on Medical Device Manufacturers
• 10% Tax on Indoor Tanning Services
• Blue Cross/Blue Shield Tax Hike
• Excise Tax on Charitable Hospitals which fail to comply with the requirements of ObamaCare
• Tax on Brand Name Drugs
• Tax on Health Insurers
• $500,000 Annual Executive Compensation Limit for Health Insurance Executives
• Employer Reporting of Insurance on W-2 (not a tax)
• Corporate 1099-MISC Information Reporting (repealed)
• Codification of the "economic substance doctrine" (not a tax)
• Elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D
• Employer Mandate on business with over 50 full-time employees to provide health insurance. $2000 per employee $3000 if employee uses tax credits to buy insurance on the exchange.
• Medicare Tax on Investment Income 3.8% over $200k/$250k
• Medicare Part A Tax increase of .9% over $200k/$250k
ObamaCare Taxes That (may) Effect the 98%
• 40% Excise Tax "Cadillac" on Premium Health Insurance Plans 2018
• An annual $63 fee levied by ObamaCare on all plans (decreased each year until 2017 when pre-existing conditions are eliminated) to help pay for insurance companies covering the costs of high-risk pools.
• Medicine Cabinet Tax In Effect
Over the counter medicines no longer qualified as medical expenses for flexible spending accounts (FSAs), health reimbursement arrangements (HRAs), health savings accounts (HSAs), and Archer Medical Saving accounts (MSAs).
• Additional Tax on HSA/MSA Distributions
Health savings account or an Archer medical savings account, penalties for spending money on non-qualifed medical expenses. 10% to 20% in the case of a HSA and from 15% to 20% in the case of a MSA.
• Flexible Spending Account Cap 2013
Contributions to FSAs are reduced to $2,500 from $5,000.
• Medical Deduction Threshold tax increase 2013
Threshold to deduct medical expenses as an itemized deduction increases to 10% from 7.5%.
• Individual Mandate (the tax for not purchasing insurance if you can afford it) 2014
Starting in 2014, anyone not buying "qualifying" health insurance must pay an income tax surtax at a rate of 1% or $95 in 2014 to 2.5% in 2016 on profitable income above the tax threshold. The total penalty amount cannot exceed the national average of the annual premiums of a "bronze level" health insurance plan on ObamaCare exchanges.
The link below provides a full list of ObamaCare Taxes by the IRS.
For a full list of taxes provisions from the IRS
New ObamaCare Taxes Overview
Going through the new ObamaCare taxes line by line is, in itself, taxing. The bottom line is that a majority of Americans will find themselves paying less for better healthcare, while the nations wealthiest will pay tax rates closer to what they did in the Clinton years. ObamaCare pays for most of itself via the above taxes, reforms to Medicare and health care as a whole, as well as cutting out billions in wasteful spending.
ObamaCare Taxes Moving Forward into 2014
We hope this helps you to understand the new ObamaCare taxes and how they work. Many of the ObamaCare's taxes won't be fully implemented until 2022. ObamaCare helps all Americans get access to quality affordable healthcare, regulates insurance and cuts waste. At the end of the day the ObamaCare taxes aren't the worst way to spend your tax dollars. Make sure to look out for ObamaCare tax breaks, credits, subsidies and breaks on up front costs moving forward into 2014. As we learn more we will update our full ObamaCare tax list.
