The 2013 effective provisions include employers reporting the value of any employer-sponsored health coverage on the employees’ W-2s (although it will not be taxable) and Health Flexible Spending Account contributions limited to $2500. Employers will also be required to provide notice to employees of the existence of state exchanges and options and the implications of obtaining health care though an exchange.
Additionally for 2013, withholding percentages for employees earning over $200,000 annually (and $250,000 for married couples filing jointly) will increase from 1.45% to 2.35%. The employer contribution will remain at 1.45%. This 0.90% increase in the FICA tax withholding percentage is estimated by the Congressional Budget Office to generate $87 billion in additional tax revenues over a ten year period. There will also be an assessment on unearned income for taxpayers on items such as capital gains, dividends, interest, annuities, royalties, and rents. The tax is 3.8% of the individual’s net investment income for the year or the excess of the individual’s modified adjusted gross income above those thresholds indicated above, whichever is less. This means that some individuals may be below the $200,000 annual compensation limit and not subject to the higher FICA tax rate, but due to their amount of unearned income may be subjected to the 3.8% tax (either due to their net investment income or after adjusting their gross income). These two tax changes combined are ACA’s single largest funding source.