How Do You Tackle Health Care Reform?
One provision at a time, of course!
Everyone is talking about the new Affordable Care Act. Everyone is reading about it. Everyone is writing about it. Everyone is learning about it. But what is anyone doing about it?
Not enough is what I am hearing from my fellow CPAs. And that is quite understandable when simply thinking about the magnitude of health care reform can leave you scratching your head. But there is a way to devour the totality of the legislation without feeling completely overwhelmed: tweak your approach. Just as the saying goes, “How do you eat an elephant? One bite at a time, of course!” The same holds true for tackling health care reform, you tackle it “one provision at a time.”
Prior to the Supreme Court’s decision on June 28 to uphold the mandate requiring most U.S. citizens and legal residents to maintain minimum health coverage, many individuals and businesses put off action in case the law was overturned. Now that the results are in, many people are taken aback wondering how to go about implementing the vast array of elements that make up health care reform.
For example, employers will be required to report the aggregate cost of employer-sponsored health coverage on an employee’s W-2, beginning with W-2s issued in 2013 covering the 2012 taxable year. CPAs will be called upon by their clients to advise them not only on what particular items of coverage must be reported in the W-2s but also how to implement a process to do so.
Fortunately, the structure of the law itself lends a hand to digesting the entirety of it bit by bit, as the effective dates are staggered (see list below). While much of the legislation went into effect the year it was enacted, many significant provisions remain. You can start with these provisions as a way to break it down into manageable pieces:
2010 - 2011
- Small business tax credit
- Adult dependent insurance coverage
- Return information disclosure
- Restrictions on use of HSA and FSA funds
- Fees on health plans
- Information reporting on W-2 (deferred to 2013)
- Additional hospital insurance tax on high-income taxpayers
- Medical care itemized deduction threshold increased
- Flexible spending account limit decreased
- Additional Medicare tax on investment income
2014 & Beyond
- Premium Assistance Credit
- Reporting requirements
- Excise tax on high-cost employer plans
Your role in assisting clients through health care reform implementation will not be a fleeting one since its impact will be felt for years to come. To lessen the burden, remember, you can tackle health care reform “one bite at a time, of course.”
And you won’t have to tackle it alone. Starting this fall, members will have access to an AICPA Health Care Reform Resource Center aimed at easing the learning curve CPAs will encounter by providing valuable how-to guidance through a series of webinars, articles and tools. As soon the center is live, we will alert you.
Kristin Esposito, CPA, Tax Technical Manager, American Institute of CPAs. Kristin serves as staff liaison to the International Tax Technical Resource Panel as well as the Employee Benefits Tax Technical Resource Panel and related task forces. Before coming to the AICPA, Kristin spent more than 15 years in a variety of corporate tax positions. She holds a Bachelor of Science in Business Administration with a concentration in Accounting from West Chester University and a Master of Taxation from Villanova School of Law.