Here are some of the major provisions that will affect most taxpayers starting in 2011:
Employers will be required to report the value of your health insurance coverage on your W-2.
What does this mean to you?
Well technically nothing since insurance coverage won’t be subject to an excise tax until 2018. Furthermore the excise tax of 40% would only apply to the employer-sponsored health insurance coverage amount that exceeds $10,200 for individuals and $27,500 for family coverage.
However once politicians start to see how much revenue could be generated from employer sponsored health insurance coverage, they may decide to apply the excise tax sooner rather than later to help pay for the deficit.
Effective January 1, 2011 only doctor prescribed medicines and insulin will be eligible for tax free reimbursement from one of the following plans.
Under current law insulin, prescribed and over the counter medicinal expenses qualify for tax free reimbursement from Flexible Spending Accounts (FSA), Health Reimbursement Accounts (HRA), Health Savings Accounts (HSA) and Archer Medical Savings Accounts (MSA)
If you are enrolled in one of the preceding plans you may want to consider stocking up on over the counter medicines this year.
This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.
