The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (often to as “Obamacare” or “Health Care Reform”) was signed into law in March 2010. (The law was upheld as constitutional by the U.S. Supreme Court in June 2012.)

The primary purpose of the law is to extend health care to millions of uninsured Americans. Here is a summary of how it may affect you so you can prepare for the short- and long-term impacts before they occur.

2013

Medicare Taxes – The employee portion of Medicare taxes increases from 1.45% to 2.35% on earnings of more than $250,000 for married filing jointly returns, $125,000 for married filing separately, or $200,000 for individuals. A Medicare tax of 3.8% will be imposed on investment (passive) income for these same higher-income taxpayers.

Itemized Deduction for Medical Expenses – The itemized deduction for unreimbursed medical expenses increases to 10% of adjusted gross income. For individuals age 65 or older, it remains at 7.5% through 2016.

Flexible Spending Account Contribution Limit – Contributions to medical Flexible Spending Accounts are limited to $2,500 per year (inflation-adjusted). If you contribute funds from your paycheck to a medical flexible spending account, the maximum amount you will be allowed to contribute per year will be the lesser of the plan maximum or $2,500.

2014

Mandatory Insurance Coverage – All individuals must carry insurance for themselves and their dependents or potentially pay a tax, which increases annually. In 2014, the tax will be the greater of $95 or 1% of income over the filing threshold; in 2015, the tax will be $325 or 2%; and the tax will be $695 or 2.5% in 2016 and beyond. Similar to car insurance for licensed drivers, minimum health insurance coverage will be required for all U.S. citizens and legal residents. If you are unable to obtain health insurance through your employer, you will be able to purchase qualified insurance coverage through state-based insurance exchanges.

Waiting Period Limits – Employers cannot wait longer than 90 days from the beginning of employment to provide health insurance to employees.

Deductible Limits – Deductibles for health plans in the small group market are limited to $2,000 for individuals and $4,000 for families.

State Basic Health Programs – Individual states may establish basic health programs to provide coverage to low-income residents who are younger than age 65, have gross family income above 1.3 times and below 2 times the Federal Poverty Level, are not eligible for Medicaid, and do not have access to affordable employer-sponsored coverage. For guidelines of the Federal Poverty Level by year visit the U.S. Department of Health & Human Services at aspe.hhs.gov.

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