Sactoking's ACA Q&A Thread

[sactoking]

I've seen quite a bit of chatter on tax boards about whether the (S corp) owner is treated as an employee or not for Obamacare purposes. Looks like we (tax community) are still waiting for clarification. IIRC, the AICPA has written the IRS asking for additional guidance.

Thanks again

Fern

I don't have the cite, but for the purposes of qualifying for small group status owners do not count as employees, there must be bona fide, non-related employees. Once group status is reached then I'm not so sure, and I think that may be what AICPA is questioning.

EX 1) A business (regardless of type) is a "mom and pop" shop. Used to be that the two of them could be considered a small group, now they are individuals since they have no bona fide employees. If they hire two bona fide, non-related employees then the group qualifies for group status and the mom and pop can participate.

EX 2) A business has 49 bona fide employees and is owned by a spousal pair. Are there 49 or 51 employees for the purposes of small/large group status? I think this is what AICPA wants to know.

 

[werepossum]

Congrats on the new job, and thanks for all your help.

 

[sao123]

I thought you weren't partisan but that wasn't a very good effort.

The excise tax on (the excess benefit of) high cost plans is designed to get insurance companies to lower the rates (and perhaps some of the frills) of the better plans and to get employers/consumers to buy cheaper plans that they actually need instead of just giving insurance companies extra money en masse (might as well give it to the government where it will be better utilized in that case) as they have been for decades.

Even with this tax looming five years in the distance, 17% of companies have opted for cheaper plans already: "According to the International Foundation of Employee Benefit Plans 17 percent of employers have revised their plans as a result of the tax this year. That’s up from 11 percent in 2011."

The excise tax wasn't devised merely to soak the middle class, as you say, (with the family limit of $27,500 this probably doesn't effect most of the middle class), but to change their habits (and those who don't change after over 7 years of warning will help pay a bit more dearly for America's healthcare). Another reason for the slow implementation of this is because group plans are bought well (years) in advance so companies/unions need time to revise their plans/contracts with employees. This is a large factor in why nearly all of the healthcare system overhaul is proceeding so slowly.

Lastly, the whole concept of "insurance" being a "benefit" of working is meant to be disappeared. Regardless of whether or not you get a federal or fortune 500 company job, one should have "good insurance." When taxes on individuals were high in the 50's employers got in the habit of providing "benefits" (company cars, lodging, better insurance) in lieu of cash to avoid that direct taxation, a habit that's never been unlearned despite plummeting individual tax rates (well for the upper classes, or in your book, the middle class).

It makes perfect sense for the government to close such "loopholes" if it loses substantial revenue to those loopholes and even more sense if consumers are unwittingly throwing away the money they earn in the process. The government is giving people/organizations time to adapt to that alteration and guiding them to make themselves richer instead of making insurance companies richer. I see that as good.

This is a terrible concept. Like many others, I chose a job with average salary so I could have better benefits with lower out of pocket costs.
Now most of the best no-copay, no-deductible policies are being eliminated. But no one is rushing to leave the $10,000 I left on the table...

Seems to me this is exaclty the opposite of what should be happening, people should be rewarded for seeking educated employment with good benefits, not cooking at my local pizzeria and buying my own basic subsidized insurance plan.

 

[werepossum]

This is a terrible concept. Like many others, I chose a job with average salary so I could have better benefits with lower out of pocket costs.
Now most of the best no-copay, no-deductible policies are being eliminated. But no one is rushing to leave the $10,000 I left on the table...

Seems to me this is exaclty the opposite of what should be happening, people should be rewarded for seeking educated employment with good benefits, not cooking at my local pizzeria and buying my own basic subsidized insurance plan.

There are arguments pro and con. Yes, Obamacare is wiping out the better health insurance plans, and no, you probably won't get back the extra money in salary. But decoupling health insurance from employment also frees us some people to start businesses without the same level of risk they faced before. And there's really no moral reason that health insurance should be untaxed if my employer provides it but taxed if I buy it with money I earn from my employer.

 

[JEDI]

With supreme court decision that says subsidies are legal, can someone refresh my memory on:

1) who pays for the subsidy?
I thought it was a surtax on those making $200k+/yr?

2) why would a state spend time/$ on setting up their own exchange?
why not just use healthcare.gov?

 

[sactoking]

With supreme court decision that says subsidies are legal, can someone refresh my memory on:

1) who pays for the subsidy?
I thought it was a surtax on those making $200k+/yr?

2) why would a state spend time/$ on setting up their own exchange?
why not just use healthcare.gov?

1. I'm not a federal appropriations specialist but my understanding is that there is no direct funding mechanism. There are various taxes built into the program such as the "Cadillac" tax, the medical device tax and the individual and employer mandate penalties but these revenues are not directly appropriated to fund the tax credit payments. Instead, the revenues just go into the general pool of the Treasury (or whatever) and the expenses come from the same place. There is no requirement that the revenues and expenditures be "budget neutral." If the revenues went away (like the employer mandate revenues have with the executive action to delay enforcement) the expenditures would still exist independently.

2. Going forward it will be difficult for a state currently on healthcare.gov to go to an independent site because there is no longer federal funding available. Many of the states that tried to go independent originally did so because it was "free." For states that want to pony up the dough there could be legitimate reasons to consider abandoning healthcare.gov including, but not limited to:
a) Cost. The federal government charges states/insurers 2.5% of premiums to operate healthcare.gov. States may be able to do it cheaper. There is also the fact that there are no guarantees that the fed won't raise that charge at any given time.
b) Security. Given the recent federal employee data breach a state may, rightly or not, distrust the data security of a federal system.
c) Flexibility. Agreeing to use healthcare.gov severely limits your options to regulate health plan design; whatever the fed wants to program into the site is what your insurer will have to comply with. Want a provider lookup tool or a plan cost estimator? Tough.
d) Data access. Using healthcare.gov obligates you to only knowing what the fed wants you to know about your enrollment numbers. You don't own any of that data and HHS wants to sandbag enrollment figures until after an election, well, tough.

 

[bockie]

I hope this is still being read.

My employer was under 50 employees a couple years ago (fall 2013 I think) and stopped providing health insurance and let us purchase subsidized insurance on the exchange.

Now the company has grown and they are offering us health insurance again that meets minimum requirements for the ACA.

From what I understand is I now have two choices. Stay on the exchange or take what my employer offers. What I am getting conflicting information on is if I am still eligible for the subsidy. Healthcare.gov web site seems to say no but when I called their 800 number they tell me yes.

Is anyone able to confirm if I lose my subsidy if my employer offers me minimum acceptable coverage again?

-bockie

 

[sactoking]

If it's being offered and it's affordable you lose your tax credit/subsidy eligibility without regard to whether you accept it or not.

 

[MovingTarget]

Sactoking, are you still updating this thread? Have you had the chance to peruse the GOP's new alternative plan, the "American Health Care Act" (AHCA)? Supposedly the CBO report on that came out today.

 

[JEDI]

Whats better for a single person, no kids (state = VA):
- Obamacare silver plan with full subsidy (and I can easily afford the subsidized premium)
- Medicaid

Why?

 

[PlanetJosh]

Just some info on my ACA plan from a lucky family meaning my father is doing well, so I can afford the individual plan I have. It seems there isn't a cheaper alternative but I could be wrong so input on that would be appreciated anyway.

We pay (my dad pays) $650/mth for a decent Kaiser plan for me in Califonia's ACA. I'm 63, retired, and have VA coverage at tier (level) 7 of priority but I don't really want the VA system to treat me if I need it. So that's why the Kaiser. I'm not retired from the Army, only had 4 years in.

My father does fine with TriCare he gets for being a retired Marine. Going a little off topic I'll get Medicare in a couple years. So I'll stop the Kaiser then and probably go with United Health for the Part B, C, D or whatever else I need to fill the missing coverage of Medicare.

 

[JEDI]

for 2019, there's new rules for getting subsidies in advance for Obamacare.
https://www.healthinsurance.org/faq...-do-during-open-enrollment-to-cover-my-bases/

healthcare.gov is asking for proof of 2019 income by feb 2019.
if you cant provide it, advanced subsidies will be cut off.

but you can still get reimbursed for them when you file your 2019 taxes by april 15, 2020 (or oct 2020 if filing extension) if your 2019 income meets the guidelines for subsidies.

 

[highland145]

$1650/mo for $14K deductible, 2018

DIAF.

 

[dank69]

$1650/mo for $14K deductible, 2018

DIAF.

Our whole system sucks. Even getting a plan from an employer sucks. You get to choose from a cheaper garbage plan or two overpriced garbage plans.

 

[Greenman]

$1650/mo for $14K deductible, 2018

DIAF.

You rube! I'm only paying $1400 a month with a $12k deductible.

 

[highland145]

You rube! I'm only paying $1400 a month with a $12k deductible.

Thanks, Bush.

 

[JEDIYoda]

who drug this piece of rubbish back up,...………..

 

[JEDI]

Healthcare.gov is a mess.
I applied for Obamacare earlier this month to renew for 2020 but I saw a possible better plan offered. I didn't select anything so I can research and closed the browser tab.

today im ready to select the new plan and logged in.
but the stupid website automatically renewed me under the old plan and there was no option to change it!!!

so after clicking a few places, I canceled something thinking it was my 2020 plan choice.
nope.
It shot me back to my application. so I confirmed my name/address/phone # and clicked on 'Next' button.
then the website gave me an error and logged me off.
I did this 3 times with the same results.

so then the thought that I canceled 2019 coverage popped into my mind. <GULP!>
now im on hold with healthcare.gov to figure out what I screwed up and hopefully its reversible... ARRRGGG!!!!!!!!!!!!!!!!

 

[dank69]

Healthcare.gov is a mess.
I applied for Obamacare earlier this month to renew for 2020 but I saw a possible better plan offered. I didn't select anything so I can research and closed the browser tab.

today im ready to select the new plan and logged in.
but the stupid website automatically renewed me under the old plan and there was no option to change it!!!

so after clicking a few places, I canceled something thinking it was my 2020 plan choice.
nope.
It shot me back to my application. so I confirmed my name/address/phone # and clicked on 'Next' button.
then the website gave me an error and logged me off.
I did this 3 times with the same results.

so then the thought that I canceled 2019 coverage popped into my mind. <GULP!>
now im on hold with healthcare.gov to figure out what I screwed up and hopefully its reversible... ARRRGGG!!!!!!!!!!!!!!!!

PEBKAC

 

[iRONic]

Any relevant information or breaking news please post here.

I'll be needing to make adjustments to my coverage. Again.

 

[JEDIYoda]

Fortunately they have not messed with my healthcare at all!!

 

[sactoking]

Any relevant information or breaking news please post here.

I'll be needing to make adjustments to my coverage. Again.

As of right now there's nothing new. If you have questions I'd be happy to answer them to the best of my ability.

 

[m8d]

We can only wish

 

[sportage]

Just some comments...
Having Health Insurance should be no different than car insurance, and everyone must have car insurance or pay a penalty. If you need care for illness or accident and have no health insurance, that is a burden placed onto others and onto the healthcare system as a whole. You avoid penalties and unable to pay your bill, however everyone else pays your penalty and your bill. Requiring everyone to have healthcare is the right way and only way to go.

Obamacare gave Americans protections, which to me was the number one advantage of Obamacare. But those protections went far beyond pre-existing protection, Obamacare also removed the cap limits, established a ratio for what insurance companies could spend money on non-healthcare items like advertising, allowing children access to their parents healthcare, and much more. When I hear of republicans hoping to kill Obamacare yet with falsely claiming to continue protections for pre-existing, people should take note that republican politicians mention nothing about protecting the other Obamacare protections beyond simple pre-existings. Republican promises only address pre-existings and nothing else, and are very misleading. Besides, in the end republicans will have no desire to replace Obamacare nor continue protecting pre-existing. What republican politicians want to do is return back to insurance for profit exactly as it was pre Obamacare. Republicans do not believe nor have republicans ever believed there was anything wrong with the old way. So, after killing Obamacare, why replace it? Just default back to pre Obamacare.

That’s all....

 

[JEDI]

apply for obamacare now or wait till after the Supreme Court verdict on it at the end of Nov?