Children’s Health Insurance Program
5. CHIP funding is authorized through 2013 but will be extended until 2015.
6. The threshold for the itemized deduction for non-reimbursed medical expenses goes up from 7.5 percent of adjusted gross income (AGI) to 10 percent of AGI. That jump is waived, however, for taxpayers age 65 and older in tax years 2013 to 2016.
7. A 2.3 percent excise tax will be imposed on medical device manufacturers.
Flexible Spending Accounts
8. Contributions to health care flexible spending accounts to cover medical expenses will be capped at $2,500 per year, but could go up based on cost-of-living adjustments. Currently there is no legal limit, but there is a use-it-or-lose-it rule for contributed funds.
Retiree prescription drug subsidies
9. The tax deduction for employers who receive Medicare Part D drug subsidies for retirees will be eliminated. Some employers have been shifting more costs to retirees despite getting government dollars to offset their costs.
10. Penalties will be imposed on employers who do not withhold sufficient Medicare payroll taxes for employees.