The Patient Protection and Affordable Care Act (PPACA) is supposed to provide health insurance subsidy tax credits for about 20 million low-income and moderate-income Americans in 2014, but it also could impose a significant increase in federal income tax payments for some high-income Americans.
Here’s a look at some of the major PPACA taxes and fees that are supposed to take effect in 2014.
- Health care industries. Insurers, drug companies and medical device manufacturers face new fees and taxes.
- The insurance industry faces an annual fee that starts at $8 billion in its first year, 2014.
- Companies that make medical equipment sold chiefly through doctors and hospitals, such as pacemakers, artificial hips and coronary stents, will pay a 2.3 percent excise tax on their sales, expected to total $1.7 billion in its first year, 2013. They’re trying to get it repealed.
- Pharmaceutical companies that make or import brand-name drugs are already paying fees; they totaled $2.5 billion in 2011, the first year.
- Employer penalties. Starting in 2014, companies with 50 or more employees that do not offer coverage will face penalties if at least one of their employees receives government-subsidized coverage. The penalty is $2,000 per employee, but a company’s first 30 workers don’t count toward the total.
- The intentionally uninsured. Nearly 6 million people who don’t get health insurance will face tax penalties starting in 2014. The fines are estimated to raise $6.9 billion in 2016. Average penalty in that year: about $1,200. The penalty provision is supposed to exempt people with conscientious reasons for refusing to buy health coverage and those who cannot find affordable coverage.
- Upper-income households. Starting Jan. 1, individuals making more than $200,000 per year, and couples making more than $250,000, will face a 0.9 percent Medicare tax increase on wages above those threshold amounts. They’ll also face an additional 3.8 percent tax on investment income. Together these are the biggest tax increase in the health care law.
- Indoor tanning devotees. The 10 percent sales tax on indoor tanning sessions took effect in 2010. It’s expected to raise $1.5 billion over 10 years. The 28 million people who visit tanning booths and beds each year — mostly women under 30, according to the Journal of the American Academy of Dermatology — are already paying. Tanning salons were singled out because of strong medical evidence that exposure to ultraviolet lights increases the risk of skin cancer.