Although the majority of changes from the Affordable Care Act, also known as Obamacare, will take place in 2014, we will see a few changes this year. New mandates of the Affordable Care Act, which was signed into law by President Obama in March 2010, go into effect starting this month.
These new mandates include more taxes; requirements for small businesses to provide health insurance to employees at no cost, and fines for those businesses that don’t comply with government regulations. This leaves many Americans wondering: what will these changes mean for small business and the local economy?
Bellefontaine Donatos owner Jim Snyder says he can’t imagine that these new mandates will have a positive outcome for small businesses in the Logan and Champaign County area.
Listen to Snyder discuss how Obamacare will affect his business now and in the future
Businesses that employ more than 50 workers will be fined a fee of $2,000 per employee if the company does not provide health care coverage for its employees. Local Congressman Jim Jordan says this requirement forces companies to make decisions that may not be in their best interest.
Listen to Congressman Jordan discuss some of the mandates of the Affordable Care Act that take place in 2013
Most of this year’s changes are geared towards helping health facilities and government offices prepare for what lies ahead in 2014.
The following are some of the major changes taking place in 2013:
Preventative services: The federal government will be sending money to state Medicaid programs that offer preventative services at little or no cost. Some of these services include testing for high blood pressure, diabetes, and high cholesterol; cancer screenings; weight-loss, smoking, or alcoholism; vaccinations, as well as flu shots.
Increased Medicaid payments: Doctors who take Medicaid patients are getting a raise. As of January 1, Medicaid payments in every state were increased to the same level Medicare pays doctors.
A pilot program for bundling services: A national pilot program that encourages medical providers to coordinate patient care will be set up as a result of Obamacare. Instead of billing each service separately under Medicare, a flat rate would be paid for one episode of care.
Medicare tax increase: In order to boost the Medicare trust fund, wealthy Americans will be taxed more on the income they earn. Individuals who earn more than $200,000 per year and couples who earn more than $250,000 a year will face a 0.9 percent tax increase on the income that exceeds those amounts.
Medical device tax: The prices of medical devices including defibrillators, pacemakers, and artificial joints will be taxed by 2.3 percent.
Medical deductions: Until this year, Americans whose medical costs exceeded 7.5 percent of their annual income received a tax deduction. Now, those costs will have to exceed 10 percent of an annual income to receive a tax deduction.
Limit on Flexible Spending Accounts: Until now, employers set the limit on the amount employees could set aside from their paychecks tax-free in order to pay for medical expenses not covered by insurance. Most businesses set a FSA limit of $5,000. The federal government has put a cap on FSA limits reducing them by half to $2,500.
Health benefits spelled out: This year’s W-2 tax forms will include a line that shows the benefit employees receive from healthcare sponsored by their employer. This is supposed to help employees better understand their benefits and to make health care spending more clear.
An estimated 50 million Americans are without health insurance at this time. More than 30 million of those uninsured Americans will receive coverage under the Affordable Care Act.