Affordable Care Act - Individual Rights and Responsibilities (Course Id 870)

Taxes - Taxes for Course Id 870

By changing many of the rules traditionally applicable to health insurance and imposing healthcare-related requirements on virtually every individual, the Patient Protection and Affordable Care Act (PPACA) is likely to affect virtually every person in the United States in some way.

The Patient Protection and Affordable Care Act (PPACA) imposes various tax increases in order to generate revenue and uses a carrot and stick approach to ensure individuals comply with its provisions by offering tax credits for compliance and, until 2019, by imposing tax penalties for non-compliance. This course will review the principal provisions of the law affecting individuals and will consider the:

• Coverage-related provisions of the PPACA addressing –
  • Plan grandfathering pursuant to which health coverage in force at the time of the law's passage may be continued,
  • The prohibition of pre-existing condition exclusions,
  • The proscription of lifetime and annual benefit limits,
  • The limitation of health coverage rescissions,
  • The requirement for certain patient protections, and
  • The requirement that plans covering children extend child coverage until age 26;
• Various personal income tax changes affecting taxpayers; and
• Tax credits authorized under the law to assist taxpayers by helping them purchase and maintain health insurance coverage.

NASBA QAS - Text - NASBA Registry - IRS Enrolled Agents - 870

Course Learning Objectives

• List the principal healthcare provisions of the PPACA affecting individuals;
• Identify those individuals who may be exempt from the individual mandate; and
• Calculate the tax credits designed to help ensure that individuals are able to purchase and maintain health insurance coverage.

Chapter 1
Overview of PPACA Provisions Affecting Individuals

• Identify the rules applicable to –
  o Grandfathered health plans,
  o The use of pre-existing condition exclusions, and
  o Annual and lifetime benefit limits;
• List the conditions that would permit an insurer to rescind health insurance coverage; and
• Recognize the requirements imposed by healthcare reform legislation with respect to –
  o Patient protection provisions,
  o The individual’s requirement to maintain minimum essential coverage, and
  o Dependent coverage for young adults.

Chapter 2
PPACA-Mandated Personal Tax Changes

• Identify the changes made by the PPACA related to –
  o The treatment of costs for over-the-counter drugs and medical expense FSA contributions,
  o The tax penalty for nonqualified Archer MSA and HSA distributions,
  o Medical expense deductions,
  o The additional taxation on the earnings of high-income taxpayers,
  o The additional tax on high-income taxpayers’ net investment income, and
  o The additional tax on estate’s and non-grantor trust’s undistributed net investment income; and
• Calculate the amount of the premium assistance tax credit available to taxpayers whose household income is less than 400% of the federal poverty line.

Course Learning Objectives

Introduction

Chapter 1 - Overview of PPACA Provisions Affecting Individuals

Chapter Learning Objectives

Introduction

Grandfathered Health Plans

Losing Grandfathered Status

Disclosure Requirements

Documentation Requirements

Actions Resulting in Loss of Grandfathered Status

Eliminating Benefits

Increasing Participants’ Cost-Sharing Requirement

Increasing a Fixed-Amount Copayment

Annual Benefit Limits Permitted under Grandfathered Individual Health Plans

Pre-Existing Condition Exclusions Prohibited

Two Criteria Present in Pre-Existing Condition Exclusion

Benefit Limits Generally Prohibited

Benefit Limit Prohibition Applicable only to Essential Health Benefits

Contract Rescission Limited

Patient Protections

Requirement to Maintain Minimum Essential Coverage

Minimum Essential Coverage

Short-Term Health Insurance Plans

Adult Children Coverage

Eligibility for Extended Dependent Coverage

Summary

Chapter Review

Chapter 2 - PPACA-Mandated Personal Tax Changes

Chapter Learning Objectives

Introduction

Tax-Favored Health Plans

Over-the-Counter Drug Costs

Nonqualified Distributions from Archer MSAs and HSAs

FSA Contributions Limited

Unreimbursed Medical Expense Deduction Threshold

Social Security Taxes

HI Component Increased for High Earners

3.8% Additional Tax on Net Investment Income for Higher-Income Taxpayers

Estates and Trusts

Refundable Tax Credits to Assist in Purchase of Qualified Health Plan

Eligibility for Credit

Federal Poverty Level

Qualified Health Plan

Amount of the Credit

Benchmark Plan

Taxpayer’s Expected Contribution

Household Income

Modified Adjusted Gross Income

Calculating the Credit

Adjusted Monthly Premium

Special Rules Applicable to the Tax Credit

Reconciling Advance Premium Tax Credits

Additional Tax Limitation

Summary

Chapter Review

Glossary