Health Care and Education Reconciliation Act of 2010 (P.L. 111-152)

The Health Care and Education Reconciliation Act of 2010, along with the Patient Protection and Affordable Care Act (P.L. 111-148), brought about major changes to the health care system. The provisions of the two acts together required health insurance coverage for almost all Americans. To this end, the acts provided for a host of tax credits and other assistance for individuals and small business, as well as new taxes and reporting requirements to pay for it all.

The Health Care and Education Reconciliation Act of 2010, after 2012, imposed a Medicare contribution tax on the unearned income of individuals, estates, and trusts. In the case of an individual, the tax was the 3.8 percent of the lesser of net investment income or the excess of modified adjusted gross income over the threshold amount of $250,000 in the case of a joint return or surviving spouse, $125,000 in the case of a married individual filing a separate return, and $200,000 in any other case.

Beginning in 2013, the act imposed a tax of 2.3 percent of the sale price on the sale of any taxable medical device by the manufacturer, producer, or importer of the device. The excise tax did not apply to eyeglasses, contact lenses, hearing aids, and any similar medical devices generally purchased at retail for individual use.

On enactment, the act extended the general exclusion for reimbursements for medical care expenses under an employer-provided accident or health plan to any child of an employee who has not attained age 27 as of the end of the tax year. The act similarly amended the code to permit a self-employed person to deduct health insurance costs for a child who has not attained age 27 as of the end of the tax year.