Health Care Reform Update — What Employers Should Be Doing Now
Lane Powell Shareholder Craig Day authored an article in Seattle Business magazine’s March issue titled “Health Care Reform Update — What Employers Should Be Doing Now.” In the article, Day discussed a number of provisions of the Patient Protection and Affordable Care Act (“PPACA”) that employers should be aware of, such as Medicare tax increases, state exchange notices and employer shared responsibility.
Although many of the provisions of the Patient Protection and Affordable Care Act were already in effect, the pace of change has quickened since the Supreme Court upheld the law in June of 2012. The law is composed of a series of provisions that have different effective dates.
Medicare Tax Increase. In 2013, an additional 0.9 percent Medicare Hospital Insurance tax applies to an employee’s wages in excess of a certain threshold ($250,000 for married taxpayers filing jointly, $125,000 if filing separately, and $200,000 for all other taxpayers). The additional tax applies only to employees, but employers are required to withhold the additional tax to the extent the individual’s wages exceed $200,000. Because the tax and the withholding rules are not synchronized, individuals may be entitled to a refund or be required to pay additional taxes when they file their tax returns.