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Affordable Care Act Taxes Remain With Possible Repeal in Limbo

Posted by Concannon Miller on Thu, Aug 3, 2017

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Affordable Care Act Taxes Remain With Possible Repeal in LimboIn a dramatic session that went into the early hours of the morning of July 28, a bill to repeal parts of the Affordable Care Act (ACA) — but retain others — failed to capture enough votes in the U.S. Senate. Senators Susan Collins (R-ME), John McCain (R-AZ) and Lisa Murkowski (R-AK) broke ranks with Republicans in the 51-49 vote against the bill, dubbed a “skinny repeal” of the law.

The bill would have eliminated:

  • The individual mandate, which imposes tax penalties on individuals who don’t purchase minimum essential coverage if they aren’t eligible for Medicaid, Medicare or other government-provided insurance (unless they qualify for an exception),
  • The employer mandate, which imposes tax penalties on certain employers that don’t offer minimum essential health insurance coverage (or that offer coverage that is unaffordable or doesn’t provide minimum value), and
  • The excise tax imposed on manufacturers and importers of certain medical devices.


Other provisions of the bill, officially called “The Health Care Freedom Act,” included an increase in contribution limits for tax-advantaged Health Savings Accounts and a restriction on federal funds to entities that perform abortions.

READ MORE: The American Health Care Act: What Business Owners Should Know

New Call-to-action Third Senate attempt

The Health Care Freedom Act was the third version of a repeal bill that Senators failed to pass this week. On July 25, after agreeing to open a health care debate, the Senate rejected the revised Better Care Reconciliation Act, its version of a bill to repeal and replace the ACA.

The next day, the Senate considered and ultimately rejected a straight ACA repeal that included a two-year delay in implementation to give Congress time to come up with a replacement.

READ MORE: Trump’s Tax Plan: The Potential Impact on Your Business

What happens next?

The Senate’s failure to pass a bill leaves efforts to repeal the ACA in limbo, as congressional leaders sort out how to proceed. They may ultimately soften any version of an ACA repeal in order to gain the bipartisan support needed to pass future health care legislation. To delay the issue further, Congress is away from Washington for the August recess.

In the meantime, the ACA — and all of its tax provisions — remains the law of the land. This includes not only the taxes mentioned above, but also the 3.8% net investment income tax, the additional 0.9% Medicare tax, the 10% of adjusted gross income threshold for medical expense deductions and the $2,600 contribution limit on health care Flexible Spending Accounts.

Contact us if you have questions about how the law affects your individual or business taxes.

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© 2017

Topics: Business tax planning, Business consulting

Concannon Miller’s unique, holistic and intimate approach to financial health sets us apart from smaller CPA firms with more limited resources as well as mega firms where mid-sized clients struggle for attention. Contact us here to talk about improving your business.

This communication is designed to provide accurate and authoritative information in regard to the subject matter covered at the time it was published. However, the general information herein is not intended to be nor should it be treated as tax, legal, or accounting advice. Additional issues could exist that would affect the tax treatment of a specific transaction and, therefore, taxpayers should seek advice from an independent tax advisor based on their particular circumstances before acting on any information presented. This information is not intended to be nor can it be used by any taxpayer for the purposes of avoiding tax penalties.

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