1. Affordable Care Act and Its
Implications for Our Patients
and Our Practices
Presented by
Allan Peiser CPA, MBA

2. Affordable Care Act
Intent - to increase access to health
insurance coverage, expand federal
private health insurance market
requirements and create health insurance
exchanges to provide certain individual
and small employers with access to
insurance.

3. Affordable Care Act
Large Employer – an employer who employed
an average of at least 50 full-time equivalent
employees (FTEs) on business days during the
preceding calendar year.
• 7/2/13 - Information reporting requirements and Employer
Shared Responsibility Provisions have been delayed until
2015

4. Affordable Care Act
Small Employer – Employers that on an average
business day employ at least 1 but not more than
50 employees. (If you have fewer than 50
employees, but are a member of an ownership
group with 50 or more full-time equivalent
employees, you are subject to the rules for large
employers.
• Delays announced on 7/2/13 DO NOT impact small employers

5. Affordable Care Act
Provisions
• Provides coverage for dependent adult children up
to the age of 26
• Eliminates discrimination for pre-existing
conditions
• Removes lifetime limits on health benefits
• Defines Essential Health Benefits to be required
in insurance plans

6. Affordable Care Act
Essential Health Benefits
• Ambulatory patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance use
• Prescription drugs
• Rehabilitative services and devices
• Laboratory services
• Preventive and wellness services and
chronic disease mgmt.
• Pediatric services, including oral and vision
care

7. Affordable Care Act
Provisions
• Guaranteed issue and renewability
• Insurance premium restrictions
• Age (no more than 3:1)
• Geography
• Family size
• Tobacco use
• Establishes a health insurance “marketplace”

8. Affordable Care Act
Healthcare Exchanges – State or Federal health
insurance “marketplaces” mandated by the ACA to offer
affordable coverage for small business and individuals.
Exchanges are responsible for calculating premiums
subsidies, enrollment, quality oversight, certification of
qualified health plans that can be sold in the exchange, and
other matters. They are meant to make the process of
selecting insurance easier and transparent. Open enrollment
begins Oct. 1, 2013 with coverage starting as soon as Jan. 1,
2014.

9. Affordable Care Act
The Small Business Health Options Program (SHOP) is
a new program that simplifies the process of buying
health insurance for your small business.
• For 2014, the SHOP Marketplace is open to
employers with 50 or fewer full-time-equivalent
employees (FTEs). The advantages of using SHOP
include:
• You control the coverage you offer and how much
you pay toward employee premiums.
• You can compare health plans online on an
apples-to-apples basis, which helps you make a
decision that's right for your business.

10. Affordable Care Act
Marketplace Plan Categories
• 4 categories based on the % the plan pays of the average
overall cost of providing ESB to members
• The plan you choose affects the total amount you’ll spend
for EHB during the year
• Bronze – 60%
• Silver – 70%
• Gold – 80%
• Platinum – 90%
• The percentage is not the same as coinsurance

11. Affordable Care Act
Impact on Small Employers
• Not required to provide health insurance, however, if
you do offer coverage it must be at least a bronze
plan
• Not required to report on W-2
W-2 reporting is optional for employers required to
file fewer than 250 forms W-2 for the preceding
calendar year (determined without application of any
entity aggregation rules for related employers)
• Required to inform employees of exchanges

12. Affordable Care Act
Impact on Small Employers
• Required to inform employees of exchanges
• Current employees – Notice Must Be Provided No Later
Than 10/1/13
• Inform employees about the existence of the Exchange and give a
description of the services provided by the Exchange
• Explain how employees may be eligible for a premium tax credit or
cost-sharing reduction if the employer’s plan does not meet certain
requirements
• Inform employees that if they purchase coverage through the
Exchange, they may lose any employer contribution toward the
cost of employer-provided coverage, and that all or a portion of
this employer contribution may be excludable for federal income
tax purposes
• Include contact information for the Exchange and an explanation
of appeal rights

13. Affordable Care Act
Impact on Small Employers
• New hires
• Employers must provide the notice to each new employee at the
time of hiring beginning 10/1/13
• For 2014 DOL will consider a notice to be provided at the time of
hiring if the notices is provided within 14 days of an employee's
start date
• Notice must be provided in writing in a manner “calculated
to be understood by the average employee
• Notice can be provided via 1st class mail or electronically
• Notice must be given to all employees regardless of full or
part time status
Sample language from the US Department of Labor is
provided in your handout for these required notifications

14. Affordable Care Act
Individual Mandate
• Individuals must obtain acceptable health insurance for
themselves and their family members or pay a penalty.
• Penalties - $95 per person or 1% of income for 2014
$325 per person or 2% of income for 2015
$695 per person or 2.5% or income for 2016 &
later
• In 2014 the fee for uninsured children is $47.50 per child.
The most a family would have to pay in 2014 is $285
• After open enrollment ends on March 31, 2014, they won't
be able to get health coverage through the Marketplace
until the next annual enrollment period, unless they have a
qualifying life event

15. Affordable Care Act
Individual Mandate
• Individuals must carry minimum essential coverage
• Any Marketplace plan, or any individual insurance plan you
already have
• Any employer plan (including COBRA), with or
without “grandfathered” status. This includes retiree plans
• Medicare
• Medicaid
• The Children's Health Insurance Program (CHIP)
• TRICARE (for current service members and military retirees,
their families, and survivors)
• Veterans health care programs
• Peace Corps Volunteer plans

16. Affordable Care Act
Individual Mandate
• Penalty Exemptions for Individuals who:
• Are uninsured for less than 3 months of the year
• Are determined to have very low income and coverage is
considered unaffordable
• Are not required to file a tax return because their income is
too low
• Would qualify under the new income limits for Medicaid, but
their state has chosen not to expand Medicaid eligibility
• Are a member of a federally recognized Indian tribe
• Participate in a health care sharing ministry
• Are a member of a recognized religious sect with religious
objections to health insurance

17. Affordable Care Act
& Dental Coverage
The ACA includes pediatric oral health benefits
on its list of 10 Essential Health Benefit that must
be offered by qualified health plans operating in
the state exchanges. Pediatric is defined as
persons under the age of 19 (although states
have the flexibility to extend such coverage
beyond the age 19 baseline).

18. Affordable Care Act
& Dental Coverage
HHS Guidance provided in Feb. 2013 regarding
coverage of pediatric dental services:
• Within the Exchange plans can:
1. Provide comprehensive coverage including pediatric oral
health benefits or
2. Where “stand-alone” dental plans exist they may exclude
coverage
• Outside the Exchanges - “plans may offer EHB that
exclude pediatric dental benefits if they are “reasonably assured”
that such coverage is sold only to individuals who purchase
Exchange certified stand-alone dental plans”

19. Affordable Care Act
& Dental Coverage
• The ADA interprets the guidance to mean that
within the Exchange the dental EHB need only
be offered but outside the Exchange it is
required.
• The guidance as it is written may be confusing
to buyers and some may not purchase
coverage for their children either accidentally
or intentionally.
• Dental services for adults are not mandated

20. Affordable Care Act
& Dental Coverage
Projections from the ADA
• ~ 8.7 million children could gain extensive dental
coverage by 2018
• 17.7 million adults could gain some sort of dental
coverage through the ACA
• 11 million pediatric private dental visits added/ 1.7
million adult private dental visits
• ~ Limited Medicaid expansion by some states will
affect coverage for adults

21. Credits
•Individual Health Care Tax Credits
• Meant to ensure people can obtain affordable
coverage
• For people with incomes higher than Medicaid
and below 400% of poverty level and are not
eligible for or offered other acceptable
coverage
• Credits apply to both premiums and cost-
sharing
•Expansion of adoption credit

22. Credits
•Small Business Tax Credit
• 25 or fewer full-time equivalent employees
making an average of $50k or less
• Pay at least 50% of your full-time employees’
premium costs
• Purchase your coverage through SHOP
• Worth up to 50% of your premium costs.
• i.e. - a business owner has10 employees, $250k
in total wages, and contributes $70k toward
premiums would get a $35k tax credit

23. Fees and Taxes
• Excise tax on medical device manufacturers
• Increased Tax on Withdrawals from HSAs
• Comparative Effectiveness Research Fees
• Increased Threshold for Medical Expense
Deductions
• Excise tax on high-cost employer plans
• Tax on indoor tanning services
• Medicare Part D Subsidy Deduction Eliminated

24. Tax on Self Employed
Income
• Medicare tax increase beginning in 2013
• 0.9% Medicare Hospital Insurance (HI) tax
• on self-employed individuals and employees
• on earnings and wages received during the year
above specified thresholds
• individual wages of an employee in excess of
$200,000
• joint return in excess of $250,000

25. Tax on Self Employed Income
Net Income $400,000
Salary & Benefits -$400,000
Profit $0
Individual Income Tax Return
Salary $400,000
Profit -$0
Taxable Income $400,000
Self-Employment Tax – Applies to
income over $250,000 MFJ
Taxable Income $150,000
Tax rate X 3.9%
Tax Owed $5,850
Net Income $400,000
Salary & Benefits -$250,000
Profit $150,000
Individual Income Tax Return
Salary $250,000
Profit +$150,000
Taxable Income $400,000
Self-Employment Tax – Applies to
income over $250,000 MFJ
Taxable Income $0
Tax rate X 3.9%
Tax Owed $0
Savings of $5,850

26. Net Investment Income
For purposes of the 3.8% tax Net Investment Income is
define in Code Sec. 1411(c) as “investment income”
reduced by the deductions properly allocable to such
income plus the sum of:
• Gross income from
•Interest
•Dividends
•Annuities
•Royalties
•Rents
•Passive income
• Other gross income
derived from any
business to which the tax
applies
• Net gain attributable to
the disposition of
property other than
property held in a trade
or business to which the
tax does not apply

27. Other Changes
Recently Enacted Tax Law Changes
Affecting Individuals
• Bonus depreciation. The 2010 Act extends for two years
50-percent bonus depreciation for qualified property. Bonus
depreciation will be available for qualified property placed in
service before January 1, 2013
• Expensing. The 2010 Act provides that, for tax years
beginning in 2012, the Section 179 small-business expensing
limitation will be $125,000. The limitation will be reduced if
the cost of the Section 179 property for that year exceeds
$500,000. Those amounts will return to $25,000 and
$200,000, respectively, after 2012.

28. MAGI
In computing MAGI for purposes of the 3.8% threshold, gross
income does not include items such as interest on tax-exempt
bonds, veterans’ benefits, and excluded gain from the sale of
a principal residence that are otherwise excluded from
income.
Watch out for theses situations:
• Gain over and above the $250,000 amount protected by the
principal residence exclusion does increase MAGI as well as net
investment income
• Lump-sum distributions from retirement plans, while excluded from
net investment income, are included in MAGI
• Converting traditional IRAs to Roth IRAs after 2012 will increase
MAGI by the amount of the converted amount

29. Planning for 2014
Planning in Uncertain Times
• Adopt a multiyear perspective in reviewing your tax situation,
evaluating the tax implications of shifting income or
deductions.
• Consider the effect of the AMT. The expected outcome of
deferring or accelerating income and deductions may be
different after determining the AMT consequences. The result
may not necessarily be intuitive.
• View transactions with regard to both their economic and tax
implications.
• Stay engaged with understanding the tax changes debated or
adopted by Washington. Be prepared to act quickly once
Congress agrees on tax rates or reform.

30. Planning for 2014
Ordinary Income
• If you believe ordinary tax rates will increase, you may want to
consider accelerating receipt of commissions, bonuses,
nonqualified stock option exercises, or billings prior to 2014.
• If you are generating a net operating loss (NOL) and believe
that ordinary rates will rise, you should consider having your
NOL carried forward to offset future ordinary income taxed at
higher rates, rather than carried back to offset income taxed at
lower rates. Careful modeling of this decision is critical and
must focus on cash flow as well as tax considerations.

31. Planning for 2014
Medicare Tax
• Consider rebalancing your investment portfolio by increasing
investments in growth assets and decreasing emphasis on
dividend-paying assets prior to 2014.
• Passive income is subject to the 3.8-percent unearned income tax;
therefore, if you have multiple passive activities, consider reviewing
current grouping elections in light of any new factual patterns for
each activity that may reclass such activity from passive to active or
vice versa.
Investment Income
• Determine whether it is better to invest funds in a taxable account or
a tax-deferred account, and consider asset allocation and
investment strategies in light of the impact of tax rates on portfolio
income.

32. Healthcare Reform
Resources
HealthCare.gov
ADA.org – search healthcare reform
IRS.gov – Affordable Care Act Tax Provisions
Homepage
HealthReformGPS.org

33. If you have any questions
please feel free to contact
Allan or Erick at:
Allan - 214-635-2503
APeiser@GPPcpa.com
Erick - 214-635-2541
ECutler@GPPcpa.com