New Tax Law and Health Care

It is no secret that health care, health insurance, and the Affordable Care Act have been at the center of many lively debates since the new administration took office. Since taking office, President Trump has taken several administrative actions to remove many provisions of the Affordable Care Act. In December 2017, Congress passed a new tax law called the Tax Cuts and Jobs Act, that had sweeping overhauls, including some that impact health care and health insurance. Despite some rumors, the new tax bill did not repeal the Affordable Care Act, but it does mean some significant changes for health care.

One of the most significant changes is that the tax bill repealed the individual mandate contained in the Affordable Care Act. The new bill provides that as of 2019, individuals will no longer be subject to a monetary penalty for failure to carry health insurance. Despite this change, for tax year 2017, if you submit your tax return forms without the required information about your health insurance as required by the Affordable Care Act, your return will be rejected and you may be subject to a fine. It is forecast that the repeal of the individual mandate will result in millions of Americans dropping their health insurance coverage. As a result, hospitals and other health care providers may change or restrict their financial assistance programs.

Although the individual mandate has drastically altered, the changes for employers are much more minor. Employers will still be required to offer an affordable health care plan for full-time employees. Employers are also still subject to penalties for failure to meet this requirement, up to $260 per employee who was not offered affordable health care coverage.

There are several other provisions which remain untouched by the tax bill. The Medicaid expansion does not change, which could impact over fifteen million people. In addition, the protections for individuals with preexisting medical conditions are also still valid. The new tax bill also allows people to deduct medical expenses from their taxes if the total expenses are more than 7.5%, which is lower than the previous amount of 10%.

We are experienced in many areas of law and strive to stay up to date on all areas of new development. Contact us today at 651-464-7292 to talk about your future and your goals.