Now that the Tax Cuts and Jobs Act of 2017 has passed, there is a ton of conjecture on the value and impact of the bill, who will gain and who will lose upon its passage, etc. But I would like to focus on the specific changes in the bill that apply directly to healthcare. There are three significant changes that I would like to focus on:
The Repeal of the Individual Mandate penalties is not actually correct as the bill doesn’t repeal the individual mandate, it reduces the penalty for not getting coverage to zero (in essence, it’s the same as repeal as it will eliminate any penalties). The question is how will this change impact the individual markets? We know that some have estimated massive changes and other say the impact will be much less. As there is plenty of comment on this change, I have picked out three articles on the subject, each with their own perspectives for you to review. They are from VOX, CNN and the New York Times:
The Temporary Medical Expense Deduction reduction was a late but significant change to the act. Initially, the bill was to eliminate the deduction for medical expenses but due to intense lobbying, the bill actually expands the deduction for two years. All taxpayers who itemize their deductions will be able to write off qualifying medical expenses that exceed 7.5 percent of their adjusted gross income for tax years 2017 and 2018. After that, the threshold would return to the current 10 percent. This is a very significant change and for a better understanding of the change and its implications, I would recommend this very good article from CNBC:
The final significant change is the changes to the Orphan Drug Tax Creditwhich encourages firms to research new medicines for diseases that don’t affect as many people. This tax credit is partially preserved as the final bill changes the 3-decade-old orphan drug tax credit to be cut in half. Current law allows companies to write off 50% of the research costs of developing drugs for diseases that strike fewer than 200,000 people. Now, the credit will drop to 25%. For pharmaceutical companies, patients and advocacy groups promoting drugs that deal with rare diseases this is bad news but it is a partial victory as some versions of the bill had proposed a complete elimination of this credit. For more on this I would suggest reviewing:
In conclusion, it is certainly not clear what the landscape of Health Care Insurance will be in the future based on the passing of this bill but it will be very interesting if the pundits are correct or the law of unintended consequences will rear its ugly head.
No matter what benefits and how are provided, the need to communicate those enrollments quickly and efficiently to insurance companies will be an ongoing need. SoftCare’s EnrollmentPlus was designed by an Advisory Council of industry enrollment experts to facilitate the easy implementation of electronic enrollments from Employer Groups through Enrollment Vendors to Insurance Carriers. Call us for more details on click on https://softcare.cominsurance-plans/ on how EnrollmentPlus can fit into your electronic enrollment architecture.
Mike Cobban, Mike.email@example.com