Private company services: Health reform implications
Although the funding of federal health reform will have a direct effect on high-net-worth individuals, careful planning can mitigate the impact. By considering tax-planning strategies and other income-preserving opportunities now, individuals will be better equipped to deal with the Act’s tax increases and other changes as they occur.
Private companies continue to assess the potential impact health reform will have on their organizations. Nearly half of all private companies interviewed by PwC in our Private Company Trendsetter Barometer survey indicated that they expected a notable financial effect on their organizations. The Trendsetter Barometer Special Topic: Private company CEOs size up healthcare reform provides insights into concerns and strategies that executives have regarding the impact of health reform.
Privately held companies are trying to determine which provisions will most affect their business. Though it’s still too early to gauge the full range and degree of the legislation’s impact on private companies, key pressure points are already evident. This supplement to 10Minutes on Health Reform addresses the impact on high-net-worth individuals, new penalties for certain transactions, M&A considerations and compliance costs.
The recently enacted healthcare reform legislation contains significant tax implications for both high net worth individuals and privately held businesses including: penalties; tax on high-value health plans; elimination of Medicare Part D subsidies; and increased reporting requirements. In particular, high net worth individuals will experience a significant tax increase on their wages (0.9%) and net investment income (3.8%) starting in 2013.
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