COMPREHENSIVE LIST OF ALL TAX HIKES
IN SENATE GOVERNMENT HEALTH BILL: H.R. 3590
Individual Mandate Tax (Page 324/Sec. 1501/$8 bil): Starting in 2014, anyone not buying
“qualifying” health insurance must pay an income surtax according to the following schedule
(capped at 8 percent of income):
Single Single +1 Single
+2<
2014 $95 $190 $285
2015 $350 $700 $1050
2016 etc. $750 $1500 $2250
Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less
than the poverty line, members of Indian tribes, and hardship cases (determined by HHS).
Employer Mandate Tax (Page 348/Sec. 1513/$28 bil): If an employer does not offer health
coverage, and at least one employee qualifies for a health tax credit, the employer must pay
an additional non-deductible tax of $750 for all full-time employees. Applies to all
employers with 50 or more employees.
If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400
tax per employee ($600 if the period is 60 days or longer).
Excise Tax on Comprehensive Health Insurance Plans (Page 1979/Sec. 9001/$149.1 bil):
Starting in 2013, new 40 percent excise tax on “Cadillac” health insurance plans ($8500
single/$23,000 family). Higher threshold ($9850 single/$26,000 family) for early retirees and
high-risk professions. CPI +1 percentage point indexed.
From 2013-2015, the 17 highest-cost states are 120% of this level.
Employer Reporting of Insurance on W-2 (Page 1996/Sec. 9002/Min$): Preamble to
taxing health benefits on individual tax returns.
Medicine Cabinet Tax (Page 1997/Sec. 9003/$5 bil): No longer allowable to use health
savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA)
pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin)
HSA Withdrawal Tax Hike (Page 1998/Sec. 9004/$1.3 bil): Increases additional tax on nonmedical
early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative
to IRAs and other tax-advantaged accounts, which remain at 10 percent.
FSA Cap (Page 1999/Sec. 9005/$14.6 bil): Imposes cap on FSAs of $2500 (now unlimited).
Corporate 1099-MISC Information Reporting (Page 1999/Sec. 9006/$17.1 bil): Requires
businesses to send 1099-MISC information tax forms to corporations (currently limited to
individuals), a huge compliance burden for small employers
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Excise Tax on Charitable Hospitals (Page 2001/Sec. 9007/Min$): $50,000 per hospital if
they fail to meet new “community health assessment needs,” “financial assistance,” and
“billing and collection” rules set by HHS.
Tax on Innovator Drug Companies (Page 2010/Sec. 9008/$22.2 bil): $2.3 billion annual tax
on the industry imposed relative to share of sales made that year.
Tax on Medical Device Manufacturers (Page 2020/Sec. 9009/$19.3 bil): $2 billion annual
tax on the industry imposed relative to shares of sales made that year. Exempts items
retailing for <$100.
Tax on Health Insurers (Page 2026/Sec. 9010/$60.4 bil): $6.7 billion annual tax on the
industry imposed relative to health insurance premiums collected that year.
Eliminate tax deduction for employer-provided retirement Rx drug coverage in
coordination with Medicare Part D (Page 2034/Sec. 9012/$5.4 bil)
Raise “Haircut” for Medical Itemized Deduction from 7.5% to 10% of AGI (Page
2034/Sec. 9013/$15.2 bil): Waived for 65+ taxpayers in 2013-2016 only
$500,000 Annual Executive Compensation Limit for Health Insurance Executives
(Page 2035/Sec. 9014/$0.6 bil)
Hike in Medicare Payroll Tax (Page 2040/Sec. 9015/$53.8 bil): Current law and changes:
Wages
(Employer/Employee)
Self-Employment
Net Income
Current Law and New
Rate on First $200,000
($250,000 MFJ)
1.45%/1.45%
2.9%
New Rate on Amount
Which Exceeds
$200,000 ($250,000
MFJ)
1.45%/1.95%
3.4%
The 0.5% new rate addition is not deductible for the self-employment tax adjustment.
Blue Cross/Blue Shield Tax Hike (Page 2044/Sec. 9016/$0.4 bil): The special tax
deduction in current law for Blue Cross/Blue Shield companies would only be allowed if 85
percent or more of premium revenues are spent on clinical services
Tax on Cosmetic Medical Procedures (Page 2045/Sec. 9017/$5.8 bil): New 5% excise tax
on elective cosmetic surgery to be paid by the surgery patient
11/18/09 For more information, contact ATR Tax Policy Director Ryan Ellis at rellis@atr.org
All figures inflation-indexed unless otherwise noted.