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New Health Care Reform Taxes Starting in 2014

Health care reform taxes
Beginning January 1, 2014, two new taxes will take effect as a result of the Patient Protection & Affordable Care Act (PPACA), or more popularly known as “Obamacare”.

The PPACA requires taxes be collected in order to fund certain provisions of health care reform. These taxes: the Health Insurer Tax and the Transitional Reinsurance Tax will be paid by health insurers, plan sponsors, and individuals. Below is a brief overview of the taxes…

Health Insurer Tax:

The purpose of this tax is to help fund premium subsidies for certain individuals and families purchasing coverage through health insurance exchanges.

Transitional Reinsurance Tax:

The purpose of this tax is to help control premiums and the cost of high-risk individuals entering the individual market in each state’s health insurance exchange.

What Is The Impact On Businesses & Consumers?

Most, if not all carriers, will pass this tax on to businesses and consumers via higher monthly premiums. For individuals & families and small groups with 50 or fewer employees, the tax will go into effect January 1st, 2014. For groups with 51 or more employees, you may see the tax this year at renewal.

What Should I Do?

Be proactive. Call your insurance carrier to see how they will handle the tax. While some will add the tax to your premium, others may leave it up to you to pay it. Knowing how your carrier will address the taxes will give you time to shop other plans and carriers if needed.