After weeks of meetings behind closed doors, the Senate has finally revealed their new health care bill which is aimed at overturning Obamacare and replacing it. If passed, the new legislation would end mandates requiring everyone buy insurance, repeal taxes on wealthy Americans and insurance companies, take away funding for Planned Parenthood for one year, and make deeps cuts in Medicaid.
Among the many potential changes to our Health Care system, here are six changes that may affect your taxes:
Employers who added a group health insurance plan to adhere to Obamacare can drop their plan or ask employees to pay a larger share of the premiums. Employers would no longer be subject to the affordability and minimum essential coverage requirements. Employers would also be allowed to shop nationwide for cheaper plans or plans with less coverage.
The proposed repeal of the 3.8% tax on net investment income could have a significant effect on tax planning. If you are considering selling appreciated property, you may want to hold off until the bill is passed to see whether or not you will be subject to this additional tax. If the bill passes as is, the effective date of the repeal would be 1/1/17.
Delaying medical and dental procedures until the bill is passed may give some tax savings if you will exceed the 7.5% of AGI limitation that the bill looks to change. You may also see some tax benefit if you have a flexible spending account and have out of pocket medical expenses that exceed the current $2,500 cap.
In order to pass the bill, Republicans must get at least 50 senators to vote for the bill. The GOP leaders hope to have a vote on the bill before the Fourth of July recess but face a great deal of opposition from democrats as well as some republicans. It may be a long road ahead before we know the final results. If you have any questions or concerns on how this bill may affect you and your taxes, please feel free to reach out to us!
-Western CPE: Health Care & Tax Planning: Changes are Coming 6/19/17
-CNBC: Here are the Details of the Senate Republican Obamacare Replacement Bill 6/22/17 http://www.cnbc.com/2017/06/22/senate-republicans-finally-unveil-their-big-obamacare-replacement-bill.html