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When Do the Health Care Reform Provisions Go Into Effect for Businesses?


Question: When Do the Health Care Reform Provisions Go Into Effect for Businesses?
President Obama signed into law HR 3590, the Patient Protection and Affordable Care Act (commonly called "Health Care Reform") in March 2010. This law was modified by a reconciliation bill. The provisions of this combined legislation go into effect at various times, starting in 2009 forward through 2018. Read more about how the health care law will affect your business. Here is a brief timeline of provisions which affect your business taxes, adapted from the Tax Foundation< .

Retroactive provisions
Small Business Tax Credit for certain small businesses (those meeting certain criteria) providing health insurance to employees (retroactive to January 1, 2010). In 2013, restricted only to insurance purchased through an exchange and only available for two consecutive years.

Provisions going into effect before the end of 2010
July 1, 2010: Impose 10% excise tax on indoor tanning services

Provisions going into effect in 2011

  • Employers must report the value of health benefits on employee W-2 forms. UPDATE: The IRS has issued a delay in this reporting requirement:
    • Employer reporting on cost of employee health care premiums is not required for 2011. (IRS Notice 2010-69), and
    • Smaller employers (those preparing fewer than 250 W-2s) do not have to include employee premium costs on 2012 W-2s (those prepared in 2013)(IRS Notice 2011-28).
  • Conform the definition of medical expenses for health savings accounts, Archer Medical Savings Accounts, health flexible spending arrangements, and health reimbursement arrangements to the definition of the itemized deduction for medical expenses (excluding over-the-counter medicines prescribed by a physician)
  • Increase in additional tax on distributions from Health Savings Accounts and Archer Medical Savings Accounts not used for qualified medical expenses to 20%

Provisions going into effect in 2012

  • Simple cafeteria plan nondiscrimination safe harbor for certain small employers
  • The provision requiring information reporting on payments to corporations (on Form 1099-MISC) has been dropped by the IRS and this reporting is no longer required.

Provisions going into effect in 2013

  • Limit health flexible spending arrangements in cafeteria plans to $2,500; indexed to CPI-U after 2013
  • Eliminate business tax deduction for expenses allocable to Medicare Part D subsidy
  • Impose Fee on Insured and Self-Insured Health Plans; Patient-Centered Outcomes Research Trust Fund (expires after 2019)

Provisions going into effect in 2014

  • Increase by 15.75 percentage points the required corporate estimated tax payments factor for corporations with assets of at least $1 billion for payments due in July, August, and September 2014
  • Excise Tax (i.e., penalty) on Employers Not Providing Health Insurance Coverage to Employees (Shared Responsibility for Employers)
  • Requirement that employers report health insurance coverage
  • Provisions specifying cafeteria treatment of employers who purchase insurance through exchange

Read more about how this health care law affects your business.

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  3. US Business Law / Taxes
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  5. Health Care & Business Tax
  6. Health Care Reform - Business Taxes - Health Care Reform and Business Taxes and Credits

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