The Latest on the Affordable Care Act

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Affordable Care Act

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In case you have taken a break from the constantly changing rules and guidelines associated with the president’s healthcare package, you should know there have been a few changes that will affect individuals and small business owners – and some of those changes are big. Keep reading as we explore the latest on the Affordable Care Act and what it means for your personal finances.

40 Provisions

In the past couple of weeks, there have been more than 40 provisions made to the tax codes, which means our friends at the IRS are going to have to take a break from those entertaining and costly videos they’re sure delight us each time the evening news plays one of them. We’re just guessing, but it’s not likely any American believes 10 grand a pop is a wise investment for the nation’s tax agency. At any rate, it looks like we’re going to be afforded a bit of time to recover from these previous videos unveiled by the media.

In all fairness, some of these latest changes will actually benefit individuals and small business owners, but those changes could be moot as we explore the other changes that feel more like a kick in the teeth.

First up, if you noticed an increase in the price of your medical device, there’s a good chance a new tax that was placed on manufacturers and importers has been handed down to you. This tax went into effect January 1, 2013. Many didn’t hear about it – but then again, there’s a lot that wasn’t necessarily common knowledge amongst tax payers.

How About a Date?

One of the biggest frustrations for many is the fact that no one seems know when the new laws kick in. Many believe that in one fell swoop, these new laws are suddenly in place. The truth is, these laws have been gradually put into place as far back as 2010. In both 2011 and 2012, even more went into effect and there are to be several more kick in before this year’s up. The vast majority of what’s left goes into effect on January 1.

A Delay, a Change and Uncertainty

That said, there has been one delay: the mandate for employers to provide affordable health care to their employees if they have more than 50 full time employees (makes sense why there have been so many part time positions filled, yes?). Failure to do so results in a $2,000 daily, per worker, penalty. That part of the law has been delayed until 2015. But there remains an October 1 deadline for employee-notification. Keith McMurdy, partner at FOX Rothschild LLP, says the $100 per-day fine has been “unfortunately overlooked” by many small businesses. That’s especially troublesome since no one seems to be ringing any bells to let these business owners know this.

That aspect of the law states that on October 1, those businesses with just one employee but with $500,000 in annual revenue will be required to contact all employees, in writing, about the various Affordable Health Care Act’s health care exchanges. If they don’t do this, they’re looking at fines of up to $100 each day. The business must be regulated by the Fair Labor Standards Act. Not only that, but new employees must be notified, again, in writing, within 14 business days. The Department of Labor will be overseeing this part of the laws.

If it sounds infuriating, you’re not alone in your thinking. Ray Keating, who is the chief economist for the Small Business & Entrepreneurship Council, told Fox News that there are many business owners who are unaware of this fine that kicks in less than thirty days from now. Worse, the government can’t seem to provide insight as to how it will implement the penalties. He explains,

It’s a steep fine – when you start tallying up all of the costs, businesses need to start figuring out ‘am I better off just not offering coverage and paying the penalty?’

He, like most others familiar with the new laws, agrees that there is no easy answer.

Government costs are what so many ObamaCare supporters have glossed over,

he says.

In general, the overall costs of subsidies and expanded programs like these things are what small business owners are concerned about, and the Obama folks are avoiding it.

But don’t look to the Obama Administration for answers. The White House is refusing to comment on how these fines are implemented and simply says questions should be directed to the Small Business Administration. That government agency is already on the defense and says it’s made education available at more than 700 outreach programs it offers to small business owners around the country. We did find a series of webinars on the SBA site that anyone can register to attend. These weekly seminars are geared to provide important information and each will include a Q&A session following the presentations.

Let’s take it a step further: not all of the requirements are even permanent. In fact, there have been a few that have already expired (yes, really). It’s difficult to discern what those expired guidelines are, though.

The Affordable Care Act and Medicare

Other aspects – especially those related to Medicare – are simply too confusing. The new rules that govern them have resulted in more than a few accountants losing sleep in their efforts of protecting their high income clients. Meanwhile, the rules governing some of them can be complex. High-income taxpayers, for instance, may come to really appreciate their accountants when it comes to figuring out whether a new Medicare tax applies to a portion of their capital gains and dividends.

Clearly, there’s a lot at stake – and while that’s frustrating enough, the fact is, there’s not going to be a single working American who doesn’t feel some kind of winds of change. It’s almost like a grab bag: you’re not sure what you’re going to get, but you know it’s going to cost you something.

It’s perhaps the small business owners who are in the line of fire at this point; but don’t let that lull you into a sense of safety if you’re not a business owner – make no mistake, these changes are going to affect your wallet, you ability to access healthcare and your ability to pay for it. But if you’re looking for straight answers, they’re not forthcoming – not yet anyway.

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About Author

Casey is a seasoned writer in personal finance. He has written a number of articles that have been published in magazines and blogs around the country. His advice has helped millions make better choices about how they save their money.


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