On Thursday, June 22, the Senate Republicans unveiled the latest draft of their proposed health care bill, which aims to repeal provisions in the current Patient Protection and Affordable Care Act. This bill has been labeled as a “discussion draft,” meaning the text of the bill that will be voted upon will likely differ from this proposed draft.
Below are highlights of the Bill’s tax provisions::
- It would limit eligibility for the premium tax credit to taxpayers whose income does not exceed 350% of the federal poverty line (instead of the current 400%) and modify how the credit works, effective for tax years after 2019.
- It would repeal the Sec. 45R small business health insurance tax credit after 2019.
- It would eliminate the Sec. 5000A individual health insurance mandate by reducing the penalty to zero, effective retroactively to Jan. 1, 2016.
- It would reduce the Sec. 4980H penalty under the employer mandate to zero, effective retroactively to Jan. 1, 2016.
- The annual fee imposed on pharmaceutical manufacturers and importers under PPACA Section 9008 would no longer be imposed after 2017.
- The annual fee imposed on health insurance providers under PPACA Section 9010 would no longer be imposed after 2017.
- The bill would repeal the Sec. 139A elimination of a deduction for expenses allocable to a Medicare Part D subsidy.
- The income threshold for itemizing medical expense deductions under Sec. 213 would revert to 7.5% from its current 10%, effective for tax years beginning after Dec. 31, 2016.
- The 0.9% Medicaid surtax under Sec. 3101 would be repealed, effective for remuneration received after Dec. 31, 2022.
- The 3.8% net investment income tax would be repealed for tax years beginning after Dec. 31, 2016.
- The Sec. 162(m)(6) $500,000 federal income tax deduction limitation for compensation paid by a covered health insurance provider would not apply to tax years beginning after Dec. 31, 2016.
A full list of the proposed tax provisions can be found in the article in the Journal of Accountancy.