Far from being the last word, the Supreme Court's decision on
the health care reform law set off a flurry of activity. States,
employers and insurers are scrambling to prepare for the next
phases of the law's rollout, even as Republican lawmakers ramp up
efforts to repeal it. Expect the law to become a major election
Our Special Report on Health Care Reform
In the meantime, many states that delayed setting up health
insurance exchanges are moving ahead to meet tight deadlines. These
markets, where people seeking individual or small-group coverage
can buy policies and apply income-based subsidies to their costs,
must be up and running by 2014. However, governors of a few states,
including Florida and Louisiana, have said they will not set up
exchanges, in effect leaving the task to the feds. Those states
also balked at expanding Medicaid coverage, which the Supreme Court
ruled they could do without penalty. Here's what to expect:
Changes in employee benefits.
In 2013, employers must limit your pretax contributions to flexible
spending accounts to $2,500 per year (down from $3,000 to $4,000
for many employers) and provide a summary of benefits during open
enrollment. Employers must also report the cost of health benefits
on your 2012 W-2-for information only. Benefits will still be
Starting in 2013, taxpayers who have a modified adjusted gross
income of $200,000 or more ($250,000 for joint filers) will pay a
3.8% tax on certain kinds of investment income, such as interest,
dividends, capital gains, rent and royalties (municipal bond
interest doesn't count). The surtax applies either to the
investment income or to the amount of AGI exceeding the threshold,
whichever is less. For example, if your joint income is $300,000
and you have $5,000 of investment income, you'll pay the tax on the
$5,000. But if your investment income is $50,000 and your joint AGI
is $260,000, you'll pay the tax on $10,000 of the investment
income. You will also pay an additional 0.9% Medicare tax on income
exceeding the AGI threshold.
By 2014, everyone must buy insurance or pay a penalty tax, and you
can no longer be rejected or charged more because of your health.
Young, healthy people buying on their own are likely to pay more
than they do now. In states that now allow different rates based on
gender, males will generally see premiums rise and females could
see some decreases when rates go unisex.
For most people who are covered by large employer-based plans,
premiums are expected to increase at about the same pace as they
have been, with a slight additional increase because of plan or
administrative costs related to reform.
Families earning up to $92,200 for a family of four will qualify
for subsidies to help pay for coverage. Small firms will determine
whether it's less expensive to provide coverage or let workers buy
insurance on the exchanges. Individuals may perform a similar
calculation, opting to pay the penalty if premiums are too high.
That could lead to more unhealthy people in the risk pool (who are
likely to decide coverage is worth it), boosting costs for
This article first appeared in
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