Obamacare rules

[Nelstax]

Merry Christmas to everyone!
Is it just me or has anyone else had trouble understanding the rules about Obamacare? I appreciate the extensive work The Tax Book staff did on putting together
everything they could find on this idiotic catastrophe but cannot find a way to understand what is being said or able to explain it to any client who might ask about it.
Does anyone else feel this will all be repealed before the end of 2014? Thank you for your thoughts.

[TaxGuyBill]

Even though it's a mess, I really doubt if it will be entirely repealed. They will probably just keep 'patching' it until it sort-of works. In my opinion, the only way it would be entirely repealed is if they come out with another similar provision to immediately take it's place. Of course, I could be wrong.

I've done a bunch of reading on the tax effects of the ACA, so if you have any specific questions I can try to help you. I'll post a link to some of my 'notes' that explain the items for individual taxpayers. I don't know if they are any easier than anything else, and they don't cover everything in detail, but the notes helped me figure things out.

http://www.pridetaxpreparation.com/downloads/ACA.doc

[Nelstax]

Thank you for responding, I will check the links. I guess I keep thinking someone will do a good thing and make it all go away.

[David1980]

Making it all go away is a difficult goal, as people generally like parts of it. And you couldn't retroactively remove parts. If an insurance company required to cover dependents til age 26 paid out for a hospitalization that occurred in 2011 they're not very well going to recover that expense even if you did retroactively change the law. Hypothetically you could eliminate all the benefits going forward, but no doubt that'd upset not only the folks losing the benefits but also insurance companies that were expecting the mandate to offset their additional expenses.

I think repeal of ACA is a bit like putting the toothpaste back in the tube.

[Uncle Sam]

Obamanationcare

"I think repeal of ACA is a bit like putting the toothpaste back in the tube".

Didn't Obama do that already?
First, the public had to purchase health insurance by other means, then after the
insurance companies cancelled the policies - Obama says "you can keep it".

What do policyholders do now if their insurance carriers won't reinstate?

[David1980]

Well you can smear the toothpaste around on the bathroom counter, sure. A modification is possible, but a repeal?

As for the "you can keep it" - that also depends on the state allowing it. Washington state for example is sticking with the stricter requirements on insurance so noone in Washington who had a policy that wouldn't qualify is able to keep that policy. If you had that policy and can't buy it, buy something else or pay a penalty.

[geekgirldany]

I always thought it would eventually be repealed but I can see now that will never happen. To my understanding I thought all existing insurance plans would be grandfathered in and I could keep mine as long as I wanted. Turned out not to be true. I can keep it until October 2014 but after that pick another plan. I decided to go with another company. PPOs are gone. Blue Cross is strictly HMO (atleast in georgia) and Humana is offering HMO or POS. I noticed on one of the health insurance applications it stated that if you got the tax credit for your premiums then they could or would modify coverage and premiums. So I could talk more about it but would get more political which don't want that. But I guess just gear up. I talked to a tax preparer the other day that got his health insurance license just for ACA to make more money. Wonder if we all will eventually be in the position to do that.

[Roberts]

As with any other government program, once built, they never die. This will NEVER be repealed.

There are good things about it and there are bad things about it. The bad things are mostly fixable over time, the discussion should be the best way to fix them.
As a small business owner, I'm interested to see what my options will be when the exchange is opened to businesses.

[Wiles]

Discriminatory insurance / Employee reimbursements

The two common income tax things that continue to allude me are:
(1) Can business still provide discriminatory health insurance coverage/reimbursement for their officer/owners?
(2) Can a business push their employees to the exchange and then reimburse for premiums under a cafeteria plan?

In the olden days of 2013, the answer to both were Yes. It seems now that the answers are either Possibly Maybe or Nobody Knows.

[TaxGuyBill]

(2) Can a business push their employees to the exchange and then reimburse for premiums under a cafeteria plan?

No.

Notice 2013-54 says:

"Question 12: Section 125(f)(3) of the Code, effective for taxable years beginning after December 31, 2013, provides that the term qualified benefit” does not include any QHP (as defined in ACA § 1301(a)) offered through an Exchange. This prohibits an employer from providing a QHP offered through an Exchange as a benefit under the employer’s Code § 125 plan."

http://www.irs.gov/pub/irs-drop/n-13-54.pdf

I haven't actually seen anywhere that Section 125(f)(3) exists, but it probably does somewhere.


For your first question, I guess I didn't realize that businesses ever could provide discriminatory health insurance coverage/reimbursement for their officer/owners. I don't deal with that very often.


EDIT: Wow! A reimbursement plan for insurance premiums is considered a 'group health plan' but it does NOT meet the ACA standards. That results in a penalty for the employer of $100 PER DAY, PER PARTICIPANT.

http://www.law.cornell.edu/uscode/text/26/4980D

[AZ-Tax]

I agree with Roberts

There are good things about it and there are bad things about it. The bad things are mostly fixable over time, the discussion should be the best way to fix them.
As a small business owner, I'm interested to see what my options will be when the exchange is opened to businesses.

I agree and addition to the ACA probably never being repealed, some on the opposite party are coming to grips with this but the question is will they come to the table and assit in fixing it. Who knows, years from now the ACA may turn out to be a good thing this is why I try to stay neutral as I think a Professional should be. Thats why we dont call politicians Professionals.

[Super Mom]

Health Coverage Tax Credit

I have never claimed this credit, and don't even know what form you would use. Has anyone claimed this credit?

[TAXNJ]

Much

I have never claimed this credit, and don't even know what form you would use. Has anyone claimed this credit?

The ACA is covered quite a lot (seems every day) on the IRS website and various articles. Your answer can be found by researching on how to handle the credit.

[Lion]

Try the Help feature in your software to guide you on how to enter. Or, call them. If preparing by hand, look at Forms 8965 and 8962 and especially their instructions; actually, read the instructions now. Read TTB, especially 1-8 and 1-11. Take a course. Get ready -- it's the middle of February already -- you need to know this stuff or know how to look it up fast.

[TaxGuyBill]

I have never claimed this credit, and don't even know what form you would use. Has anyone claimed this credit?

If you actually mean the "Health Coverage Tax Credit", that goes on Form 8885. If I remember correctly, anybody that qualifies for that receives a packet in the mail telling them about it.

https://www.irs.gov/Credits-&-Deductions/Individuals/HCTC

If you mean the Premium Tax Credit of buying health insurance through the Healthcare Marketplace and the taxpayer received a 1095-A, that is on Form 8962.