Recently, JDT Unbound sat down with NADL Executive Director Bennett Napier, CAE, to talk about the Patient Protection and Affordable Care Act, how it affects NADL members and the Supreme Court's recent decision. 

What is NADL's position on the Patient Protection and Affordable Care Act? 

The NADL has not taken a position on the overall act, although it has gone on record formally seeking repeal of the medical device excise tax which is encompassed as a provision in the act.

What concerns about the Act have you heard from NADL members? 

Primarily, in opposition to the medical device excise tax provision. The association has not received direct feedback on the act itself, however, one can speculate that dental laboratories have modified their employee health care coverage’s whereby employees are sharing in the cost of more of the premiums based on the results from the last several annual cost of doing business surveys. This trend maybe a reaction to pending increased expenses for employers which take effect in 2014.

What is NADL's reaction to the Supreme Court's decision? 

Again, NADL does not have a position on the overall act. However, politically, with the Court’s decision it makes the likelihood of Congressional repeal of the excise tax that much harder.

The medical device excise tax will be collected and remitted by the manufacturer or seller, operating essentially the same as a sales tax. It will not represent income or expense to the manufacturer. The amount of tax will be excluded from the price in determining the amount of tax, whether it’s listed as a separate line item or not. A shipment of devices for $100 will notrequire a remittance of $2.30 ($100 x 2.3 percent). The manufacturer will remit $2.25, as the calculation of tax assumes the $100 received included a price of $97.75 for the devices and $2.25 for the excise tax. A manufacturer seeking to keep $100 after tax will need to collect $102.30 from the buyer, regardless of whether the price was $100 with a separate $2.30 line item for tax or whether the price to the buyer was simply listed as $102.30 without a separate line item for tax.

The proposed regulations do not specifically address the time and manner for reporting and paying the medical device excise tax, but the current rules for other manufacturers’ excise taxes are expected to apply. If this is the case, the tax must be reported quarterly on Form 720, which will be due the last day of the month following the close of the quarter. A semimonthly deposit of the medical excise tax is expected to be required by the 14th day following the close of each semimonthly period. It is anticipated that electronic deposit of taxes will be required.

The new law does not impose new requirements on small employers (fewer than 50 workers), but will provide new health insurance alternatives to them through state-based Small Business Health Options Program (SHOP) exchanges. As a result, they will tend to be unaffected or experience savings under reform.

While no small employer will be required to provide coverage to their workers, those that do provide coverage must limit waiting periods to no more than 90 days and eliminate lifetime and annual benefit limits.1 Employers that offer dependent coverage will also be required to offer that coverage to their workers’ adult children up to age 26.

What is NADL recommending dental laboratory owners do if they are not happy with the Act? 

In June the U.S. House of Representatives passed H.R. 436, the Health Care Cost Reduction Act of 2012 (formerly titled the Protect Medical Innovation Act of 2012), by a 270-146 vote. Among other things, the bill repeals the medical device excise tax created by the Affordable Care Act (“ACA”). Under the ACA, beginning in 2013, an excise tax of 2.3% will be imposed on the sale of any medical device (as defined in the FDC Act) by the manufacturer or importer.  Members are encouraged to write their U.S. Senator asking for the U.S. Senate to take up this House Resolution and pass it and explain how detrimental this new tax will be on dental laboratories which are primarily small businesses.