How the Implications of the Affordable Care Act Affect Investors

Posted by adaniels in Blog on July 5, 2012

What does the Supreme Court’s historic decision to uphold the Affordable Care Act, aka Obamacare, mean for financial advisor and investors? OnWallStreet.com looks at the decision, and its effects.

First up, the mandate means that those who do not pay for health care will be assessed a tax. OnWallStreet.com says that “for planners to the affluent or ultra rich or to those with existing employer-provided insurance, this new tax will not need a lot of analysis or explanation since it primarily hits those currently without coverage whose household incomes are below $90,000. Further, if the tax works the way it should, it will rarely be assessed.”

However, that’s not the only new thing to know about the legislation. OnWallStreet.com says that even with the Affordable Care Act, health care costs will continue to increase. It advises that advisors tell their clients about health savings accounts and long-term care plans.

The most important thing for higher-end clients to know is that “the 0.9% add-on to the payroll tax, and the 3.8% surcharge on investment income is now certain to take effect in 2013,” meaning more costs for people in that bracket.

Even though the act will allow parents to keep their children on their health insurance until age 26, the publication says that “now may be a good time for us urge our clients to set these kids free and off the family payroll, since at least in the area of health care coverage, these adult children will be able to get and pay for insurance even without jobs.”

The publication also says that financial advisors will be valuable in explaining the many implications of the bill to their clients, saying that “helping clients to be ready for and to manage uncertainty is what we are all about.”

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