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Obama Care Taxes

Posted on July 30, 2013 by admin

When you hear “Obama Care,” you probably think of a health insurance requirement. However, there is more to it than just that. In fact, there are several taxes and tax breaks that have been instituted as part of Obama Care. So, just what are they and how might they impact you on a personal or business level?

The Individual Mandate

One of the most talked about Obama Care taxes is the individual mandate. It says that, prior to January of 2014, you as an individual must get some form of healthcare or get an exemption. Otherwise, you will have to pay a tax fee.


The Employer Mandate

The employer mandate says that any business owner who has over 50 full-time equivalent (FTE) employees has to provide decent health insurance for their employees. Otherwise, they have to pay a tax fee each year. That fee is called the “shared responsibility fee.” It guarantees that business owners will contribute to healthcare costs one way or the other. That will begin in 2015.


Medicare Tax Increases

Starting in January of 2013, Obama Care Medicare tax increases began. There are two separate tax increases relating to Medicare. One charges a 3.85 tax on unearned income (investment income) for individuals making at least $200,000 per year or couples making at least $250,000. That is on top of the 2.9% Medicare payroll tax that was already charged.

The other new Medicare tax also applies to individuals earning at least $200,000 or couples earning at least $250,000. It is a .9% Medicare Part A tax increase.

Other Tax Increases

There are several other Obama Care tax increases that will affect individuals or groups. For instance, there are new taxes on health insurers and brand name drugs. There will also be a 2.3% tax on manufacturers of medical devices. Other taxes include:

  • A 10% Tanning Tax to Start in 2014
  • An Increase in Blue Cross/Blue Shield Tax Rates
  • A Charitable Hospital Excise Tax for Hospitals Not Meeting Obama Care Requirements

Tax Breaks

The good news for some is that certain tax breaks were also included as part of Obama Care. For example, small business tax credits are available in some cases. The Small Business Health Options Program (SHOP) may entitle small business owners to be reimbursed for up to half of their employee premium costs.
Another available tax break through Obama Care is advanced premium tax credit. That may entitle people who get insurance through the State’s Health Insurance Marketplace to get tax credits to lower their up front healthcare costs.

Nevertheless, there are still a lot of debates going on about whether the new Obama Care taxes are more harmful or helpful to both businesses and individuals.