The New Tax Reform Bill: Impact on Health Insurance

At the end of 2017, Congress passed a Tax Reform Bill that includes a few employer-provided health and welfare-related provisions. Below is a brief summary of some important changes taking place as a result of the new bill.

  • Individual Mandate Penalty – $0 Starting in 2019

As a reminder, the Individual Mandate is the part of the Affordable Care Act that institutes a penalty on individuals that do not maintain health coverage during the year.

  • Medical Expense Deduction

The law expands the medical expense deduction for 2017 and 2018 for qualified expenses exceeding 7.5% of adjusted gross income.

  • Employer Tax Credit for FMLA Leave

For 2018 and 2019 only, the law creates a tax credit for employers that pay employees while on FMLA leave. Vacation leave, personal leave, or other medical or sick leave do not count for this purpose. The credit is generally 12.5% of the amount of wages paid to qualifying employees.

Please note that this is not a full review of the law, but focuses solely on provisions that employers should be aware of in relation to the health and welfare benefits they provide.

Members of the Greater West Chester Chamber of Commerce have access to the My Benefit Advisor program for employee benefits and their experts can help you with your compliance and health care reform questions. For more information about the MBA program, contact, contact Christopher Sloane at (610) 537-1429.