Questions and Answers on Additional Medicare Tax

The Affordable Care Act (ACA) increases the Medicare hospital insurance tax rate for high-income individuals beginning in 2013. The Internal Revenue Service (IRS) issued answers to frequently asked questions (FAQs) regarding the Additional Medicare Tax. The Additional Medicare Tax applies to individuals’ wages, other compensation and self-employment income over certain thresholds.

Proposed Rules on the Additional Medicare Tax

On Nov. 30, 2012, the Internal Revenue Service (IRS) released proposed regulations on the Additional Hospital Insurance Tax, also known as the Additional Medicare Tax. Under the Affordable Care Act (ACA), effective Jan. 1, 2013, employers must withhold an additional tax of 0.9 percent on wages in excess of $200,000 that any of their employees receive in a calendar year.

IRS Updated Form 720 for PCORI Fees

The Affordable Care Act (ACA) created the Patient-Centered Outcomes Research Institute (Institute) to help patients, clinicians, payers and the public make informed health decisions by advancing comparative effectiveness research. The Institute’s research is to be funded, in part, by fees paid by health insurance issuers and sponsors of self-insured health plans. These fees are widely known as Patient-Centered Outcomes Research Institute fees (PCORI fees), although they may also be called PCOR fees or comparative effectiveness research (CER) fees.

“Cadillac” Tax on High-cost Health Coverage

For taxable years beginning in 2018, the Affordable Care Act (ACA) imposes a 40 percent excise tax on high-cost group health coverage. This tax, also known as the “Cadillac tax,” is intended to encourage companies to choose lower-cost health plans for their employees.

Health Insurance Providers Fee

The Affordable Care Act (ACA) imposes an annual, non-deductible fee on the health insurance sector, allocated across the industry according to market share. The fee, which is treated as an excise tax, is required to be paid by Sept. 30 of each calendar year beginning in 2014.