Nearly all Obamacare taxes repealed. The bill repeals all Obamacare taxes starting in 2018. The biggest ones here are the 3.8 percentage point Medicare payroll tax bracket, the 3.8 percent surtax on savers, the "high medical bills tax," the "medicine cabinet tax," a flurry of tax increases on health savings accounts (HSAs) and flexible spending accounts (FSAs), the medical device tax, and a series of tax hikes on various health industries....
Individual mandate and employer mandate retroactively repealed. These two Obamacare taxes have been zeroed out and retroactively applied to 2016 onward.
Ryan Ellis , CONTRIBUTOR
When tax and fiscal policy meets political reality.
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The House Ways and Means Committee just released their half of the Obamacare "repeal and replace" bill. They are in charge of the tax part. Here is a quick summary:
Nearly all Obamacare taxes repealed. The bill repeals all Obamacare taxes starting in 2018. The biggest ones here are the 3.8 percentage point Medicare payroll tax bracket, the 3.8 percent surtax on savers, the "high medical bills tax," the "medicine cabinet tax," a flurry of tax increases on health savings accounts (HSAs) and flexible spending accounts (FSAs), the medical device tax, and a series of tax hikes on various health industries. One missing tax repeal is the economic substance doctrine, but that may have to do with the "Byrd rule" limitation on reconciliation bills.
Individual mandate and employer mandate retroactively repealed. These two Obamacare taxes have been zeroed out and retroactively applied to 2016 onward. If necessary, families and businesses will be able to file amended returns to get their penalty taxes back.
"Cadillac plan" tax deferred until 2025. The most significant Obamacare tax not repealed is the 40 percent excise tax on high cost, employer provided health insurance plans ("Cadillac plans")
New tax credit to purchase health insurance. Starting in 2020, those not offered health insurance at work (this will have to be certified) or eligible for government health insurance (Medicare or Medicaid) will have the ability to use a new advanceable/refundable healthcare tax credit. It's only available to citizens and green card residents, and is not available to prisoners.
The credit is age adjusted. You simply add up the people in your household to determine the credit size:
Children and those under age 30 get $2000
30 to 39 year olds get $2500
40 to 49 year olds get $3000
50 to 59 year olds get $3500
60 year olds to Medicare age get $4000...
This credit is "advanced" every month by their insurance company toward their premium. If our family above wanted a plan with premiums of $12,000 per year/$1000 per month, they would only have to pay $2000 out of pocket/$167 per month (the credit reduces the premium dollar for dollar up front, every month).
If our family wanted a less expensive health insurance plan that cost $9000, their $10,000 credit would be enough to pay for the whole thing. The remaining $1000 could be deposited into the family HSA (without lowering the maximum HSA contribution limit).
HSAs Greatly Expanded. The House bill greatly expands HSAs starting in 2018 in three ways. First, the contribution limit is nearly doubled from about $6500 today for a family to about $13,000 (these figures halved for singles). That means that HSAs will become a powerful new financial savings vehicle to rival 401(k)s and IRAs.
