Federal Health Care Reform update

photo credit: indigo_belle

July 25 update -

The House Ways and Means Committee has voted for $1 trillion in added revenue over the next ten years to pay for health care reform. Although the legislation is still developing, here are some of the revenue proposals that were in the Ways and Means July 17 recommendations:

A tax surcharge on individuals who earn more than $350,000 would start at 1% but increase up to 5.4% for those with modified adjusted gross incomes that exceed $1 million.

A non-compliance tax would be imposed on individuals that do not acquire acceptable health insurance coverage for themselves and their family. Each individual will be required to maintain a health insurance plan for themselves and their families, or be subject to an additional tax of 2.5% of adjusted gross income, effective after December 31, 2012.

A non-compliance tax for employers employers who do not provide to their employees health care coverage meeting certain minimum coverage requirements. Employers that elect to not provide health insurance coverage to employees will pay an additional payroll tax equal to 8% of gross wages. This would be a separate payroll tax from the one imposed on wages for social security purposes with no wage base limitation. A small business exception is provided for employers with payrolls less than $400,000.

A tax credit would be available to small employers for providing new health insurance coverage.

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