Upcoming Affordable Care Act (ACA) Taxes

1.            How are the ACA taxes factored into the medical rate?

Blue Shield calculated the cost of ACA taxes and included the amount in the medical rate.  The medical rate that customers will see on bills starting with January 2014 invoices includes the portion for the ACA taxes at the subscriber and dependent level.

2.            I purchased plans in 2013. Are the ACA taxes now included in my rate?

Yes. The new ACA taxes will be included in the medical rate for small business customers starting with January 2014 invoices.

3.            With the ACA taxes included in medical rates, how do I calculate payroll deductions?

The taxes taking effect on January 1, 2014, represent a 3.6% change of the medical rate.  Blue Shield does not offer tax advice, and we encourage you to speak with your tax or financial advisor for guidance.

Type of tax
Takes effect
Approximate cost
Health insurer tax 01/01/14 2.3% of dues and/or premiums
Transitional reinsurance tax 01/01/14 1.3 % of dues and/or premiums
Exchange tax upon renewal, 2014 0.2% of dues and/or premiums
Risk adjustment tax upon renewal, 2014 0.02% of dues and/or premiums


Reference: Blue Shield of California