PLUS: Obamacare Rollout

A year-by-year snapshot of the mandates that will impact businesses as well as self-employed contractors.


+ ACA will limit contributions to a health Flexible Spending Account (FSA) to $2,500 per year, indexed to the Consumer Price (inflation) Index.

+ ACA will raise the income threshold for claiming itemized deductions for medical expenses.

+ ACA will add an additional tax of 0.9 percent to Medicare Part
A hospital insurance on those earning $200,000 ($250,000 married, joint filers). For the first time, the taxable base includes net investment income for filers in this category.

+ ACA will eliminate the subsidies for employers who maintain prescription drug plans for Medicare Part D retirees.


+ ACA will require each person to buy “acceptable” health insurance (the individual mandate) or pay an annual penalty, not to exceed $2,250 per family. However, higher penalty rates will be phased in: $95 penalty or 1.0 percent of an individual’s income in 2014; $325 or 2.0 percent of income in 2015; $695 or 2.5 percent of income in 2016.

+ ACA will levy a 2.3 percent excise tax on all medical device manufacturers.

Exemptions include producers of eyeglasses, contact lenses, and hearing aids, plus any devices that a consumer may purchase at a retail outlet.

+ ACA will create a state-based American Health Exchanges and Small Business Health Options Program. SHOP
is a health insurance exchange for individuals and small businesses with up to 100 employees.

+ ACA will require that businesses with 50 or more full-time employees must either offer “acceptable” health insurance coverage or pay a penalty of $2,000 for each employee hired full time. Even if businesses offer insurance coverage, they will be charged a fine of $3,000 for each low-income employee who receives federal taxpayer subsidies for insurance.

+ ACA will impose a
new fee on the insurance industry: $8 billion in 2014; $11.3 billion in 2015/2016; $13.9 billion in 2017; $14.3 billion in 2018. After that, it will be indexed to medical growth.


+ ACA will permit states to offer businesses with more than 100 employees the opportunity to purchase insurance through exchanges, much like the Small Business Health Options Program.


+ ACA will levy a 40 percent excise tax on “high-value” or “Cadillac” health insurance plans.

Many mandates specified in this timeline have firms and individuals scrambling to understand and become more proactive in coping with impending costs, benefits, and uncertainties associated with the ACA. Complete implementation of Obamacare reform is scheduled to span nearly the entire decade and undoubtedly will be subject to unforeseen changes, which is true for almost all tax and regulatory programs that face headwinds from special interest lobbyists, media critique, and general public reaction. db

— David Littmann