by Nancy Frazier O’Brien

WASHINGTON (CNS) – As the head of a small evangelical college serving 2,400 undergraduates and 600 graduate students, the Rev. Philip Graham Ryken has no quarrel with contraception on religious grounds but doesn’t want any part of a health insurance plan that offers certain drugs that can cause abortions.
So the president of Wheaton College in Illinois has vowed to resist requirements under the new health care law to provide all contraceptives approved by the Food and Drug Administration – including two that can prevent implantation of a fertilized egg – free of charge to its employees.
If the school is unable to offer health coverage which complies with its moral and religious beliefs, that position could put him in line for taxes and penalties totaling $1.4 million a year for faculty and staff alone, Rev. Ryken said at a recent teleconference announcing a lawsuit against the contraceptive mandate.
“This is a time to be cutting costs, not adding costs to university budgets,” he said.
Beginning Jan. 1, 2014, employers with 50 or more full-time employees that do not offer health insurance will be subject to a fine of $2,000 per employee, excluding the first 30 employees, if any employee receives a premium tax credit.
Those tax credits will be available to individuals and families with income between 133% and 400% of the federal poverty level.  In 2012, the federal poverty level was $11,170 for an individual and $23,050 for a family of four, meaning that tax credits could go to families of four with income as high as $92,200.
Costs Could Swamp Church
With more than 107,000 faculty and staff members at more than 200 U.S. Catholic colleges and universities, the total potential tax liability in Catholic higher education could be staggering if they feel compelled to drop their insurance.  Add to that the nation’s 629 Catholic hospitals employing more than 640,000 people, and the 381,000 people who work in 3,300 local Catholic Charities offices around the country, and the costs could swamp an already financially beleaguered U.S. Catholic Church.
But the penalty on employers is far from the only tax contained in the Patient Protection and Affordable Care Act.  The best known is the individual mandate, affirmed by the U.S. Supreme Court as a tax, which could cost those without health insurance up to $295 or 2.5% of taxable income, whichever is greater, by 2016.
Taxes related to the individual mandate – assessed by the Internal Revenue Service – begin at $95 per person or 1% of taxable income in 2014 and go up from there. Those without coverage for less than three months, American Indians, prisoners, undocumented immigrants, those who have religious objections to obtaining health insurance and those whose incomes are below the tax filing threshold will be exempt.
One of the first taxes to take effect after the March 2010 passage of the Affordable Care Act was a 10% tax on indoor tanning services, imposed since July 1, 2010.
Among the others:
• An increase in Medicare payroll taxes from 1.45% to 2.35% on earnings over $200,000 for individuals and $250,000 for married couples filing jointly, effective Jan. 1, 2013.
• An excise tax of 40% to be imposed on so-called “Cadillac coverage” health insurance plans valued at $10,200 for individual coverage and $27,500 for family policies, beginning Jan. 1, 2013.  The tax will apply only to amounts above the thresholds and will be levied on insurers and self-insured employers, not directly on employees.
• Annual fees of up to $4.1 billion (in 2018) on the pharmaceutical manufacturing sector.  The fee for 2012-13 was $2.8 billion.
• Annual fees of up to $14.3 billion (in 2018) on the health insurance sector.  The first fee, of $8 billion, is to be imposed in 2014.
Those who itemize deductions on their tax returns will see the threshold for medical deductions rise from 7.5% of adjusted gross income to 10% beginning in 2013, except for people 65 and over.  Contributions to flexible spending accounts for medical expenses will be capped at $2,500 a year in 2013, with any later increases pegged to the cost of living.
Other taxes and penalties are likely to arise as various federal agencies issue their final regulations related to the health care law.
Because the tax credits can trigger fines on employers who do not provide health insurance, court action is  likely – joining some two dozen other lawsuits challenging aspects of the health reform law.