10% tax on tanning starts today

iVillage Member
Registered: 09-07-2009
10% tax on tanning starts today
Tue, 03-23-2010 - 9:39pm


Health-Care Overhaul Changes to Start Taking Effect This Year

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By Shannon Pettypiece and Alex Nussbaum

March 23 (Bloomberg) -- Indoor tanning salons will charge customers a 10 percent tax beginning today in just one of the changes Americans will see as a result of the U.S. health-care overhaul signed into law by President Barack Obama.

Insurers will be required by September to begin providing health coverage to kids with pre-existing illnesses and allow parents to keep children younger than 26 on their plans as the clock has begun ticking on many of the law’s provisions. Medicare recipients will receive a $250 rebate for prescription drugs when they reach a coverage gap called the donut hole if the Senate passes and the president signs companion legislation approved March 21 by the U.S. House.

The $940 billion overhaul subsidizes coverage for uninsured Americans, financed by Medicare cuts to hospitals and fees or taxes on insurers, drugmakers, medical-device companies and Americans earning more than $200,000 a year. Many of the changes in the bill of more than 2,400 pages, such as requiring most people to have health insurance and employers to provide coverage, will take at least two years to go into effect.

“Most of the major public policy changes embodied in the health care reform legislation will become effective only after the next presidential election in 2012,” said Maury Harris, an economist with UBS AG, said in a research report.

High-Risk Pools

Within 90 days, the law will provide immediate access to high-risk insurance plans for people who can’t get insurance because of a pre-existing medical problem, Harris said. These high-risk pools will be funded by $5 billion in federal grants.

Companies led by Minnetonka, Minnesota-based UnitedHealth Group Inc., the largest health insurer, will be banned within six months from dropping a person’s coverage because of severe illness and from limiting lifetime or annual benefits.

Participants in Medicare, the U.S. government’s health coverage for those 65 and older, are expected get a $250 rebate toward prescription drugs once their benefits run out -- a coverage gap know as the “doughnut hole.” The benefit is part of the package of amendments to the legislation now pending in the Senate. Drugmakers led by New York-based Pfizer Inc. will have to offer discounted drugs to Medicare recipients next year, according to an analysis of the legislation by the Kaiser Family Foundation, a nonprofit group based in Menlo Park, California

In 2013, individuals whose annual income is more than $200,000 and couples making more than $250,000 will see an increase in Medicare payroll taxes. Those taxes will also be expanded to cover dividend, interest and other unearned income.

Employer Coverage

In 2014, employers with more than 50 employees will be required to provide health coverage and most people will be required to have health insurance, Harris said in his report.

A tax on high-cost “Cadillac” policies won’t go into effect until 2018. The insurance industry also faces about $60 billion in additional fees under the health bill through 2018, and more beyond, though it was able to postpone the levy until 2014.

By 2019, the bill is expected to have expanded health insurance coverage to 32 million people, according to UBS’s Harris.

The U.S. Health and Human Services Department will have two years to set penalties on hospitals with high readmission rates and longer to test new payment systems for Franklin, Tennessee- based Community Health Systems Inc., the largest U.S. chain, and its rivals.

Financial Disclosure

Insurers also will have to reveal how much of members’ premiums they spend on medical care, as opposed to executive salaries or other administrative costs. Next year, they’ll owe a rebate to customers if the insurers spend less than 80 percent on benefits for people in individual or small-group plans.

Starting in 2014, states have their say. The legislation leaves it to them to set up and run the online marketplaces, known as exchanges, where customers will comparison-shop for coverage. Among other powers, the exchanges will be able to banish plans for premium increases deemed to be unjustified.

The legislation also creates an Independent Payment Advisory Board to suggest cuts in spending by Medicare, the government health program for the elderly and disabled, that could threaten payments for drug and device-makers. Starting in 2014, the panel’s recommendations would take effect unless federal lawmakers substitute their own reductions.

To contact the reporter on this story: Alex Nussbaum in New York anussbaum1@bloomberg.net; Shannon Pettypiece in New York spettypiece@bloomberg.net


iVillage Member
Registered: 03-25-2003
Tue, 03-23-2010 - 9:49pm

Guess they haven't figured out how to tax the sun yet.

Oh, wait, that's global warming... never mind.



iVillage Member
Registered: 09-07-2009
Tue, 03-23-2010 - 9:53pm
You are funny, this only came to my attention because it is almost Prom season here in Minnesota and well we get pasty and alot of the girls use the services, which I don't like fake bake but I did it in high school as well. It will be more spendy for prom i guess.
iVillage Member
Registered: 11-27-2009
Tue, 03-23-2010 - 9:56pm
Same here in Illinois. Not too many girls that don't try to get in at least one session, usually more, before the Prom. The dresses just don't look good on that pasty skin.
iVillage Member
Registered: 04-10-2003
Wed, 03-24-2010 - 2:43pm
Why not? They've been taxing other "sins" for ages (tobacco products, alcohol).

iVillage Member
Registered: 10-14-2001
Tue, 03-30-2010 - 12:35am

I think this is terrible.

I am not partial to tanning salons but to pick them over all the other items that really harm us, is just arbitrary.

Well, it's not really arbitrary...the reason is that tanning salons don't have the clout that the alcohol, tobacco, meat and dairy, processed food industries, sugar, etc have so they pick on the little guy.

And I am not big on sin taxes. Why? Because the government ultimately wants more money and once they tax "sin" industries...they will never want them to go away because they really want more money instead.

The whole thing is just boggles.

iVillage Member
Registered: 02-01-2010
Tue, 03-30-2010 - 1:17am
When did tanning become a sin?
iVillage Member
Registered: 02-14-2010
Tue, 03-30-2010 - 2:16am
When liberals decided they wanted more money.
iVillage Member
Registered: 02-01-2010
Tue, 03-30-2010 - 3:12am
Jeeze...ain't that the truth.
iVillage Member
Registered: 10-25-2006
Tue, 03-30-2010 - 8:02am
Tax on tanning? Just fine by me. I told my congressmen to tax junk food, too.



iVillage Member
Registered: 01-06-2001
Tue, 03-30-2010 - 11:15am
Junk food is already taxed. At least it is here.