Health Care Act of 2010

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Health Care Act of 2010 (Main page article)


The final health insurance reform legislation (the Senate bill as improved by the Reconciliation Bill) that the House passed on March 21st will ensure that all Americans have access to quality, affordable health care and significantly reduce long‐term health care costs. The non‐partisan Congressional Budget Office (CBO) has determined that it will provide coverage to 32 million more people, or more than 94% percent of Americans, while lowering health care costs over the long term. This historic legislation will reduce the deficit by $143 billion over the next ten years, with $1.2 trillion in additional deficit reduction in the following 10 years.


  • Bars insurance companies from discriminating based on pre‐existing conditions, health status, and gender.
  • Provides Americans with better coverage and the information they need to make informed decisions about their health insurance.
  • Creates health insurance exchanges – competitive marketplaces where individuals and small business can buy affordable health care coverage in a manner similar to that of big businesses today.
  • Offers premium tax credits and cost‐sharing assistance to low and middle income Americans, providing families and small businesses with the largest tax cut for health care in history.
  • Insures access to immediate relief for uninsured Americans with pre‐existing conditions on the brink of medical bankruptcy.
  • Creates a reinsurance program in support of employers who offer retirees age 55‐64 health coverage.
  • Invests substantially in Community Health Centers to expand access to health care in communities where it is needed most.
  • Empowers the Department of Health and Human Services and state insurance commissioners to conduct annual reviews of new plans demanding unjustified, egregious premium increases.


  • Expands eligibility for Medicaid to include all non‐elderly Americans with income below 133 percent of the Federal Poverty Level (FPL).
  • Replaces the so‐called “Cornhusker” deal with fair assistance for all states to help cover the costs of these new Medicaid populations.
  • Maintains current funding levels for the Children’s Health Insurance Program (CHIP) for an additional two years, through fiscal year 2015.
  • Increases payments to primary care doctors in Medicaid.


  • Adds at least nine years to the solvency of the Medicare Hospital Insurance trust fund.
  • Fills the Medicare prescription drug donut hole. In 2010, Medicare beneficiaries who go into the donut hole will receive a $250 rebate. After that they will receive a pharmaceutical manufacturers’ 50% discount on brand‐name drugs, increasing to a 75% discount on brand‐name and generic drugs to close the donut hole by 2020.
  • Provides new, free annual wellness visits, and eliminates out‐of‐pocket copayments for preventive benefits under Medicare, such as cancer and diabetes screenings.
  • Provides better chronic care, with doctors collaborating to provide patient‐centered care for the 80% of older Americans who have at least one chronic medical condition like high blood pressure or diabetes.
  • Improves Medicare payments for primary care which will protect access to these vital services.
  • Reduces overpayments to private Medicare Advantage plans. Medicare currently overpays private plans by an average of 14 percent. This legislation reins in those overpayments to ensure a fair payment system that rewards quality.
  • Encourages reimbursing health care providers on the basis of value, not volume. The bill includes a number of proposals to move away from the “a la carte” Medicare fee‐for‐service system toward paying for quality and value while reducing costs for America’s seniors.


  • Promotes preventive health care at all ages and improves public health activities that help Americans live healthy lives and restrain the growth of health care costs over time. The legislation eliminates cost‐sharing for recommended preventive care, provides individuals with the information they need to make healthy decisions, improves education on disease prevention and public health, and invests in a national prevention and public health strategy.


  • Makes key investments in training doctors and nurses and other health care providers. Currently, 65 million Americans live in communities where they cannot easily access a primary care provide. An additional 16,500 practitioners are required to meet their needs. The legislation addresses shortages in primary care and other areas of practice by making necessary investments in our nation’s health care workforce. Specifically, it will invest in scholarship and loan repayment programs through the National Health Service Corps to expand the health care workforce. The bill also includes incentives for primary care practitioners and for providers to practice in underserved areas.


  • Provides consumers with information about physician ownership of hospitals and medical equipment companies, as well as nursing home ownership and other characteristics. The bill also includes provisions that will crack down on fraud, waste, and abuse in Medicare, Medicaid, SCHIP and private insurance. It establishes a private, non‐profit entity to identify priorities in patient‐centered outcomes research that will provide doctors with information on how to best treat patients and end wasteful overspending.


  • Establishes a regulatory pathway for FDA approval of biosimilar versions of previously licensed biological products.


  • Makes long‐term support and services more affordable for millions of Americans by providing a lifetime cash benefit that will help people with severe disabilities remain in their homes and communities. CLASS is a voluntary, self‐funded, insurance program provided through the workplace. For those whose employers participate, affordable premiums will be paid through payroll deductions. Participation by workers is entirely voluntary. The Congressional Budget Office confirms that the program, which has been revised from earlier versions, is actuarially sound.


  • Reduces the deficit in the next ten years and beyond. The bill is fully paid for with revenue provisions that focus on paying for reform within the health care system.
  • Tightens current health tax incentives, collects industry fees, institutes modest excise taxes, and slightly increases the Medicare Hospital Insurance (HI) tax for individuals who earn more than $200,000 and couples who earn more than $250,000. The taxable base of the HI tax is also broadened by including net investment income. The HI tax increases will not only help fund health care reform, but, when combined with other provisions in the bill, will also extend the solvency of the Medicare Trust Fund by at least nine years to 2026.
  • Includes a fee on insurance companies that sell high cost health insurance plans. The fee is designed to generate smarter, more cost‐effective health coverage choices. The reconciliation bill delays this new fee until 2018 so that plans have time to implement reform and begin to save from its efficiencies.
  • Changes health care tax incentives by increasing penalties on nonqualified distributions from HSAs, capping FSA contributions, and standardizing the definition of qualified medical expenses. The industry fees and excise taxes reflect responsible contributions from health care stakeholders who will benefit from the expanded coverage of millions of additional Americans under health care reform. The bill also assesses a small excise tax on indoor tanning services.
  • In total, the revenue provisions in the bill represent a balanced, responsible package of proposals that bend the health care cost curve by putting downward pressure on health spending, close unintended tax loopholes, and promote tax compliance.


Supporting Documents (LINKS to the acts and the Technical Explanation)

Related guidance

(if a link is red, then please check the site for the guidance as it hasn't yet been imported to TA)

  • Notice 2010-38 - guidance on the tax treatment of health coverage for children up to age 27 under PPACA and HCERA
  • Notice 2010-39 - request for comments regarding additional requirements for tax-exempt hospitals
  • Notice 2010-40 - FSA contribution limits
  • Notice 2010-44 - Sec. 45R, health care credit
  • Notice 2010-45 - Sec. 48D, Qualifying Therapeutic Discovery Project Credit
  • Notice 2010-51 - Request for comments on new information reporting (1099-MISC) requirements
  • Notice 2010-59 - Guidance on OTC drugs, medicines w/r/t HSAs, HRAs, FSAs, MSAs (modified by Notice 2011-5)
  • Notice 2010-60 - Request for Comments Regarding Implementation of 1099-MISC Information Reporting for FFIs
  • Notice 2010-62 - Regarding the Economic Substance Doctrine
  • Notice 2010-63 - RfC on Reqmts Prohibiting Discrimination in Favor of Highly Compensated Individuals (Group Plans)
  • Notice 2010-66 - Changes to adoption credit for 2010
  • Notice 2010-69 - Deferral of W-2 reporting of health insurance cost (now optional for 2011)
  • Notice 2010-71 - Branded prescription fee (modified and superseded by Notice 2011-9)
  • Notice 2010-79 - Re. Sec. 833 and Medical Loss Ratios (also see Notice 2011-51, 2012-37)
  • Notice 2010-82 - Health Care Credit - amplifies Notice 2010-44.
  • Notice 2010-89 - RfC regarding excise tax on medical devices
  • Notice 2011-1 - More RfC on Reqmts Prohibiting Discrimination in Favor of Highly Compensated Individuals (Group Plans)
  • Notice 2011-2 - Guidance on the Application of Section 162(m)(6)
  • Notice 2011-4 - Special rules on unearned premiums, Sec. 833(c)(5)
  • Notice 2011-5 - Modifies Notice 2010-59; more info on new Sec. 106(f)
  • Notice 2011-9 - Branded prescription fee (also see Rev. Proc. 2011-24, Notice 2011-92)
  • Notice 2011-20 - PPACA Sec. 3022, regarding tax-exempt orgs participating in MSSP through an ACO
  • Notice 2011-23 - Regarding Sec. 501(c)(29)
  • Notice 2011-28 - Interim guidance on informational reporting of the cost of employer-sponsored group health plan coverage (this notice has been clarified by Notice 2012-9)
  • Notice 2011-35 - RfC on fees imposed under sections 4375 and 4376 (also see REG-136008-11)
  • Notice 2011-36 - Request for Comments on Shared Responsibility for Employers Regarding Health Coverage (Section 4980H)
  • Notice 2011-46 - modifies Notice 2011-9 and Rev. Proc. 2011-24, re branded prescription drug fee
  • Notice 2011-51 - Extension of transition relief, interim guidance on Sec. 833
  • Notice 2011-52 - Community health needs assessments (CHNA) and related requirements
  • Notice 2011-73 - Request for Comments on Health Coverage Affordability Safe Harbor for Employers (Section 4980H)
  • Notice 2011-92 - Regarding the branded prescription drug fee (for 2012; see Notice 2012-74 for 2013)
  • Notice 2012-4 - Regarding Form 990, Schedule H
  • Notice 2012-9 - Guidance on informational reporting of the cost of employer-sponsored group health plan coverage
  • Notice 2012-17 - frequently asked questions about employer shared responsibility (Sec. 4980H)
  • Notice 2012-31 - Minimum Value of an Employer-Sponsored Health Plan for Sec. 36B and Sec. 4980H
  • Notice 2012-32 - Request for Comments on Reporting under Sec. 6055 (Reporting of Health Insurance Coverage)
  • Notice 2012-33 - Request for Comments on Reporting under Sec. 6056
  • Notice 2012-37 - Additional extension of transition relief, interim guidance on Sec. 833
  • Notice 2012-40 - New rules about the amount that can be contributed to an FSA
  • Notice 2012-58 - Determining FTE for Sec. 4980H (large employers/small employers, full-time, seasonal, etc.)
  • Notice 2012-59 - 90-day waiting period limitation
  • Notice 2012-74 (offsite link) - Regarding the branded prescription drug fee (for 2013; see Notice 2011-92 for 2012)
  • Notice 2012-77 (offsite link) - Interim Guidance and RfC; Medical Device Excise Tax
  • T.D. 9482 - Rules for Group Health Plans/Health Insurance Issuers, Dependent Coverage to Age 26 under the PPACA
  • REG-114494-10 - (IRB 2010-22) related prop reg for TD 9482
  • T.D. 9486 - Final regulations on excise taxes for indoor tanning services
  • REG-112841-10 - (IRB 2010-27) related prop reg for TD 9486
  • T.D. 9489 - Rules relating to status as a grandfathered health plan
  • REG-118412-10 - (IRB 2010-29) related prop reg for TD 9489
  • T.D. 9491 - relating to preexisting condition exclusions, lifetime and annual limits, rescissions, and patient protections
  • REG-120399-10 - (IRB 2010-32) -related prop reg for TD 9491
  • T.D. 9493 - guidance on preventive health services
  • REG-120391-10 - (IRB 2010-35) related prop reg for TD 9493
  • T.D. 9494 - (IRB 2010-43) Offsite link - requirements for internal claims and appeals, external review processes
  • T.D. 9506 - rules relating to status as a grandfathered health plan
  • T.D. 9544 - (IRB 2011-40) Offsite link - Regarding the branded prescription drug fee
  • REG-131491-10 - (IRB 2011-36) Proposed regulations under section 36B of the Code provide rules relating to the premium tax credit (see T.D. 9590 for final regulations)
  • T.D. 9574 - (IRB 2012-12) Offsite link - temporary regulations on Sec. 501(c)(29)
  • REG-135071-11 - (IRB 2012-12) temporary regs on application for 501(c)(29) status
  • T.D. 9575 - required elements for the summary of benefits and coverage (SBC)
  • REG-140038-10 - (temporary link) proposed regs for disclosure of the summary of benefits and coverage (SBC)
  • T.D. 9590 - final regulations relating to the health insurance premium tax credit in Sec. 36B
  • REG-113770-10 - (IRB 2012-13) Offsite link - medical device excise tax
  • REG-136008-11 - (IRB 2012-19) Sec. 4375 and 4376 fees paid by issuers of certain health insurance policies and self-insured plans
  • REG-119632-11 - (IRB 2012-23) proposed regulations relating to the disclosure of return information under section 6103(l)(21)
  • T.D. 9596 - (IRB 2012-30) (Offsite link) - more guidance on excise taxes on indoor tanning services
  • REG-125570-10 - (IRB 2012-30) (Offsite link) - related reg for TD 9596
  • REG-130266-11 - (IRB 2012-32) (Offsite link) - guidance on financial assistance policy for tax-exempt charitable hospitals
  • REG-130074-11 (pdf) Offsite link) - Rules Relating to Additional Medicare Tax (0.9% tax)
  • REG-130507-11 (pdf) Offsite link) - re new Sec. 1411, 3.8% medicare tax (net investment income)
  • REG-138006-12 (early release copy) - re Shared Responsibility for Employers Regarding Health Coverage under Sec. 4980H
  • T.D. 9602 (pdf) Offsite link) - Final Regs on Fees on Health Insurance Policies and Self-Insured Plans for the Patient-Centered Outcomes Research Trust Fund
  • T.D. 9604 (early release copy) - Final Regs on Medical Device Excise Taxes
  • T.D. 9608 - Disclosure or Use of Information by Preparers of Returns (Sec. 7216), effective 12/28/12
  • T.D. 9611 (early release copy) - Final Regs on the premium tax credit affordability test for related individuals
  • REG-138500-12 (early release copy) - Proposed Regs on the Individual Shared Responsibility provision

Related forms

Informal guidance

Relevant offsite links

Related tax discussions

Discussions that were hot for a while, but are now mainly moot

Discussions/articles about all of the inaccurate info being disseminated in bogus e-mails

Adding search terms; this act is often referred to as the "Affordable Care Act" or PPACA / HCERA / ACA.

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