What Do Healthcare Reform and the "Fiscal Cliff" Have In Common? Tax Increases

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On June 28th, the U.S. Supreme Court upheld the new healthcare reform law in part by ruling that the individual mandate is a tax and Congress has authority to impose the individual mandate under Congress’s taxing power. As a result, all of the new healthcare reforms enacted under the law remain on the books. Also important is that all of the new tax provisions that were enacted to pay for the expansion of healthcare coverage remain in full-force.

Why Is This Important?

Every company – large or small, nonprofit or for-profit – is bracing for the projected “fiscal cliff” at the end of 2012. If Congress does not act by the end of this year, the scheduled spending cuts (known as “sequestration”) take effect, along with the expiration of the reduced individual income tax rates, the $5 million estate and gift tax exemptions, and the favorable tax rates for capital gains and dividends (i.e., the Bush-era tax cuts). Now that the new healthcare reform law has been upheld, companies and individuals also must brace for new taxes on investments and wages that go into effect January 1, 2013.

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Topics:  Affordable Care Act, Compliance, Fiscal Cliff, Individual Mandate, Medicare, Penalties

Published In: Administrative Agency Updates, Health Updates, Insurance Updates, Labor & Employment Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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