New Health Care Act Provisions

[Uncle Sam]

How many of you have gone through TTB's course on the New Tax Law Review?

I have and all I can tell you is that the economic effects are disasterous!!!!!!!!

People below poverty level or those who don't independently pay out-of-pocket insurance in absence of an employer plan, are going to have an "option" of going into a "pool' where you can ask for subsidy - BY DISCLOSING YOUR FAMILY INCOME in order to obtain the credit. Then the taxpayer's return gets adjusted for the difference between the "handout credit' and the amount actually paid.
Those who don't or can't avail themselves of these options then have to pay a tax penalty for NOT having insurance.

Also - small employer businesses (under 25 employees)who don't have at least full time equivalent employee of at least one, do not get any health insurance credit on new Form 8941.
Employers now need to be year round calculators of each employee's hours to calculate the credit. Where's an employer's time more valuable - providing services for the production of income - or devoting administrative time to work out these calculations.

Also - with the government now having more if its hand in health care regulation - I'm sure that reimbursements to health care providers will be lower than private insurance - so the better quality physicians are NOT going to want to subscribe to these government insurance pools - so on an overall basis, the quality of health care will go down.

So - who really benefited from Obamacare?

[Nashville]

The Gubbermint

So - who really benefited from Obamacare?

This is a massive shift of power and control to the Federal Government. Of the many complaints we have in our healthcare system, this bill did nothing to stop any of them, and only made them worse.

The talk was plenty tough. Stop this double-digit inflation by healthcare providers. Stop these cherry-picking practices by the big insurance companies. Allow medicare to negotiate with Drug Companies (who are currently protected by a 2005 George Bush presidential decree).

Did any of this happen? No. However, insurance companies are now "forced" to cover children up to age 26 -- but this resulted in 1.5 million new customers under the age of 50. Talk about a windfall!!

But what concerns most of us here is the massive tax increase all brought on under the disguise of Healthcare reform.

Remember the provisions of this new bill any time you think government can actually improve ANYTHING. Turns out to just be one huge institution tag-teaming with other huge institutions. If you think they have your best interests in mind -- better think again.

[Bees Knees]

We as tax professionals will have to be the new health care police. Imagine all the new due diligence requirements that will be placed on us to make sure everyone complies with the new laws.

[Uncle Sam]

Health Care Police

We as tax professionals will have to be the new health care police. Imagine all the new due diligence requirements that will be placed on us to make sure everyone complies with the new laws.

Thanks Bees - that's also what I was looking to point out - but forgot.

We're being armtwisted to do the government's job for them.
I'm not a health care professional conversant with medical terminology or knowledgeable about medical ethics. Nor do I have the resources to be a timekeeper simply to keep track of employee eligibility of health benefits.

[Edsel]

Health Care Police

Bees is probably right, but I'm not interested in being anyone's police, and may become adamant about that in the face of new IRS philosophy which goes after preparers instead of taxpayers.

From the standpoint of the tax practitioner, I am going to rely almost exclusively on information returns supplied by employers and others. W-2s and 1099s will need to be extensively overhauled.

Where this brilliant plan fails: I have clients who themselves are employers and other payers. They are going to depend on ME to tell them how to provide this new information on W-2s and 1099s that are issued. Of course, I don't have Aetna, Hartford, or any of those folks, but I assume they have resources to stay on top of what is to be reported.

This TaxBook website has a home page which advertises a publication covering the new Healthcare Act, and its effect on taxes. Unless this lame duck congress looks like it is willing to make substantial changes, I'm going to order it in December.

[Davc]

http://www.youtube.com/watch?v=sb59uJNJVJc

[geekgirldany]

I am currently reading the new health care law book from TTB. I am amazed at the changes taking place. That youtube video Dave posted is pretty good and right on the money. Our duties as accountants has turned into the health care advisors also it appears.

[Bees Knees]

http://www.youtube.com/watch?v=sb59uJNJVJc

The sad part of that video is that is exactly what we have to do to correctly calculate the credit. AND, this credit applies for 2010. How many of us are actually going to go through each of those steps to figure the correct amount?

[Uncle Sam]

Health Care Act Provisions

In reading through the provisions from TTB's course - and considering my clients who COULD qualify for it - THERE ISN'T ONE that qualifies for the credit.
Either they don't presently have health insurance, or the average salary is ABOVE $ 25,000, or they have a RELATIVE working for them.
In every case - I've got a disqualifier.

Let's face it - as I said before - what's our purpose?
Is it to provide sound tax advice and preparation based on a given set of facts and be knowledgeable of tax law?

Or is it to be employment calculators for one narrowly defined employee fringe benefit provision simply to obtain a negligible tax credit for which we're not going to get compensated for our efforts.

[Bees Knees]

The relative doesn't disqualify the credit if the employer has other non-relative employees.

[taxxcpa]

Old dog, new tricks?

I'm an old dog that is not planning to learn any new tricks. I will prepare tax returns and report information the client provides. I am not going to become a health care expert or administrator. I would retire if I'm being forced to be responsible for compliance with the health care laws.

[JG EA]

I will prepare tax returns and report information the client provides. I am not going to become a health care expert or administrator

I will not either. For the same reason I don't offer financial planning. It's not the job I want to do. I do TAX returns and TAX planning and associated TAX tasks. Also I've always hated insurance. You know how our clients' eyes glaze over when we start talking about tax law? Well, that is me on insurance.

[Bees Knees]

I'm an old dog that is not planning to learn any new tricks. I will prepare tax returns and report information the client provides. I am not going to become a health care expert or administrator. I would retire if I'm being forced to be responsible for compliance with the health care laws.

So if one of your small business clients offers health insurance to its employees, you are going to ignore the 35% small business tax credit they may be entitled to?

[DMICPA]

Health Insurance Credit

Boy, It is good to know I am not the only one steamed about this health care credit.

Now, here is what I was considering to handle this. Please share your thoughts.

1. Inform the client that there is this new law and a credit is possible. Give them a summary of the requirements.

2. Tell them to compile the insurance expense for the qualified employees and hours.

3. Tell them that in order to calculate this credit, the above schedule must be in my office by the end of January. If the schedule is not complete and accurate, I will not have the time to calculate the credit.

4. Tell them that the cost of doing this credit will necessarily increase the cost of the tax return preparation and that is beyond my control.

As always, I will phrase things nicely and try to be positive.

I woud send this letter in December.

Any thoughts?

[DaveO]

Most small companies I deal with are family operations, husband and wife and maybe some kids or other relatives. With the credit not allowed for the owner, spouse or other kin I can’t imagine there is going to be a rush by these small businesses to cover their other employees.

I think the whole problem could have been solved by the government requesting a proposal from existing insurance companies to offer a suite of 3 plans; a single person plan, a plan for a married couple without dependent children and a family plan. Rates would be set in a range with some adjustments for age and family size but not preexisting conditions. These would be basic plans with co=pays, deductibles and a lifetime and maybe an annual cap on benefits. The plans would be open to all comers, low income taxpayers could qualify for a refundable tax credit. The kicker would be if an insurance company wishes to offer any health insurance it must offer these three plans. In this manner the insurance company can decide if it wants to play and the people can decide if they want to pay. To induce businesses to offer coverage a dollar for dollar credit against FICA and Medicare up to a limit of $3000 per covered employee per year could be offered.