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2011 is going to be an interesting year, to say the least. With the federal government dealing with the congressional changes, the Wall Street Reform Act and the potential for Congress to either repeal or significantly change the PPACA ("ObamaCare"), it's going to be a year of change.

Our friends at advisorfyi.com, a company that provides insight and intelligence for "savvy investors," has a multitude of great articles surrounding the financial world. One of the more noteworthy articles is one entitled "Health Insurance Coverage for All Americans" and discusses certain applicable areas for wealth managers and others in the financial services world. In this case, there are specifics that detail how the PPACA (Patient Protection and Affordable Care Act) will impact the "individual mandate" required of the PPACA and the Health Care and Education Reconciliation Act (HCERA), legislated in 2010 and signed into law by President Obama.

Courtesy of advisorfyi.com, the following information (quoted from their white paper on the subject) should raise a high level of concern on the part of individuals covered by this mandate. To wit:

"Under the new law, each individual is required to have 'minimum essential coverage' for each month of the yar starting in 2014. 'Minimal Essential Coverage' means whichever; a government sponsored program such as Medicare, Medicaid and TRICARE; an employer sponsored plan; plans in the individual market; and grandfathered health care plans.

For those individuals who choose not to obtain minimum essential coverage, imposed is a penalty to be included in the taxpayer's annual return. The penalty applies to each month where the individual is not covered equal to an amount of 1/12 of the average cost of 'bronze' level coverage, or, the greater of an annual set dollar amount, which is pegged at $695 for tax years 2016 and beyond, or a set percentage of the taxpayer's household income, currently 2.5% beginning after 2016. The flat dollar amount is $95 for 2014, $325 for 2015. The percentage of household income is 1% for 2014 and 2% for 2015.

As well, the new law created additional employment taxes to pay for additional Medicare coverage.

First, the new tax adds an additional .09% on earned income for those earning more than $200,000, or $250,000 if filing jointly with regards to Medicare. The total employee contribution for those affected by the surcharge is 2.35%, while the employer's tax will remain at 1.45%

Second, the laws created a hefty 3.8% tax on net investment income for those with AGIs (Adjusted Gross Income) over the $200,000/$250,000 limit. Net investment income in this context generally means interest, annuities, dividends, royalties, rents and capital gains."

Thanks once again to our friends at advisorfyi.com for their tremendous research and development of information on this critical piece of American history. Our next series of articles will discuss additional changes in the financial services industry, associated law and rule changes and how all of these new and required mandates will actually work... if they work! In closing, please let me know your concerns by commenting below. Legislators and others subscribe to our RSS feed on the insurance blog and they read your concerns and comments. So... what do you think? Have a great new year!