ClaimLinx Publishes, “How to Beat Obamacare”

CINCINNATI–(BUSINESS WIRE)–ClaimLinx recently published a timely new book entitled, “How to Beat Obamacare.” The book briefly covers the most important parts of the Patient Protection and Affordable Care Act signed into law in 2010 by President Obama. It gives individuals and employers a framework for making smart choices in the new healthcare environment. The book also reveals the secret to saving money on individual health insurance plans for employers.

The authors, Edward A. Lyon, JD CTC, Michael J. McCormick, CPA, ETC, Thomas J. Quigley, Jr. and Christy A. Quigley have over 80 years combined experience in the tax and insurance industry.

In writing the book, Ed Lyon makes it clear that “we’re not here to debate the merits of the law, but we can help by outlining what the law means for you, for your healthcare, and for your taxes.”

Back In 2010, President Obama signed the “Patient Protection and Affordable Care Act” and companion “Health Care and Education Reconciliation Act of 2010.” Together those two acts, better known by Republicans and Democrats alike as “Obamacare,” represent the biggest change in how we finance healthcare since Medicare was created in 1965. They also include some of the most significant tax changes in a generation. Polls show even today most Americans are confused and concerned about how the Affordable Care act directly affects them – what it is and how much it’s going to cost. Michael McCormick adds, “One poll taken in August of 2013, revealed that four out of ten believed the law was repealed, overturned, or were unsure if it was still law.”

The book outlines a plan which takes advantage of a 55-year-old tax law, Internal Revenue Code Section 105b, that allows employers to reimburse their employees for medical costs incurred by themselves, their spouses, and their dependents. This, in turn, lets employers buy less expensive, higher-deductible insurance coverage – then reimburse their employees directly for the difference between the old deductible and the new. Average yearly savings per employee are $2,000. This program is available in all 50 states and can be implemented and administered fully by ClaimLinx consultants.

For more information about “How to Beat Obamacare,” please visit amazon.com or www.claimlinx.com.

The Health Care Overhaul – What You Need to Know

The Affordable Care Act’s financial protections and coverage requirements are likely to help older adults (50+) the most.

State-based health-insurance exchanges created by the 2010 Patient Protection and Affordable Care Act opened for business on October 1. For those who can’t get insurance coverage through work, or for the self-employed who have been buying coverage as sole proprietors, the exchanges will serve as clearinghouses for evaluating and buying health plans.  These policies take effect Jan. 1 and must cover 10 “essential benefits,” including: preventative services, hospitalizations, mental health and prescription drugs. Also, insurers can no longer exclude people with pre-existing conditions.

Going Without

  • This is good news for individuals ages 50 to 64, who typically have more health problems than those who are younger.
  • Twenty percent of the 50-to-64 demographic went without health insurance for at least part of 2012, up from 15% in 2005, says the Commonwealth Fund, a New York-based nonprofit that focuses on health-care issues.
  • 20%-29% of people in that age group were rejected when applying in 2008, the latest year for which figures are available.
  • Many older people with insurance at work would like to make a change but are clinging to their jobs for the health coverage
  • Because insurers can no longer turn people down, it is much easier to obtain coverage under the new law.

Young Subsidize Old

Employers now have until 2015 to provide coverage for their workers in order to avoid a penalty.  Individuals are not so fortunate, however, as they must purchase a policy for 2014 or face a $95 or 1% of income tax penalty.  (This will rise to $695, or 2.5% of income in 2016).

  • Timothy Jost, a law professor at Washington and Lee University in Lexington, Va.  notes that the new policies taking effect in January will benefit older consumers who tend to spend more on health care, because they will provide more comprehensive coverage with lower premiums.
  • Insurers can no longer charge higher premiums based on health status, nor can they charge the oldest consumers more than three times the average premium paid by a 21-year-old (a possible savings of $1,800 per year).
  • “Early retirees will benefit most from the health-care law,” says Prof. Jost in Virginia. Younger, healthier people will “pay higher premiums to subsidize the rates of those who are older and sicker,” he adds.
  • If however, younger, healthier people decide to pay penalties instead of buying insurance, it could drive the cost of coverage up in 2015 and beyond.

Tax Credits

  • Tax credits also factor into the premium equation. Individuals with incomes of up to $45,960 and couples earning up to $62,040 may be eligible for tax credits that cap their premiums between 2% and 9.5% of income.  Older people will benefit the most from these caps, since they are usually charged higher premiums by insurers.
  • For example, a 55-year-old Denver resident who earns $45,000 a year and picks a policy that Anthem Blue Cross & Blue Shield plans to offer there for $597 a month would be eligible for $240 in monthly tax credits. A 27-year-old with the same salary and policy would pay $281 a month and receive no tax credits, according to the nonprofit Colorado Consumer Health Initiative.

Please click here to read the article in its entirety written by Ann Tergesen. You may also want to visit the ClaimLinx Exchange as well as the interactive guide to health reform for additional resources and information.

Lending Money to Family? Make it a Tax-Smart Loan

One of our tax advisors, Dave Toney of AccountTax, offers these tips when lending money to family.
While lending money to a cash-strapped family member or friend is a noble and generous offer, you need to plan ahead before handing over the cash to avoid tax complications.

Let’s say you decide to loan $5,000 to your daughter who’s been out of work for over a year and is having difficulty keeping up with the mortgage payments. While you may be tempted not to charge an interest rate, you should resist the temptation because:

  1. When you make an interest-free loan to someone, you will be subject to “below market interest rules”.  IRS rules state that you need to calculate imaginary interest payments from the borrower, which are then paid to you.  You will be required to pay taxes on these interest payments when you file a tax return. Further, if the imaginary interest payments exceed $14,000 for the year, there may be adverse gift and estate tax consequences.
  2. The exception is for small loans of $10,000 or less. The IRS lets you ignore the rules for small loans as long as the aggregate loan amounts to a single borrower are less than $10,000 and the borrower doesn’t use the loan proceeds to buy or carry income-producing assets.
  3. In addition, if you don’t charge any interest, or charge interest that is below market rate, then the IRS might consider your loan a gift, especially if there is no formal documentation (i.e. written agreement with payment schedule). It is best to have a written promissory note that includes the interest rate, a repayment schedule showing dates and amounts for all principal and interest, and security or collateral for the loan, such as a residence. Make sure that all parties sign the note so that it’s legally binding.

As long as you charge an interest rate that is at least equal to the applicable federal rate (AFR) approved by the Internal Revenue Service, you can avoid tax complications and unfavorable tax consequences.

If you have questions about the tax implications of loaning a family member money, don’t hesitate to contact us at dat.accountax@fuse.net or view our website here.

Many State Health Insurance Marketplaces will Exceed Requirements

This October brought a monumental start for the country. With its first day, the health care marketplaces opened, and the largest, most complex aspect of the Affordable Care Act began.

While there are problems to fix, the state-run health insurance marketplaces are poised for success, as they are expected to exceed minimum requirements by 2014.

According to a Commonwealth Fund report, the state-run exchanges will surpass federal quality-reporting standards, offer small-business employees a choice of health plan and promote a seamless “one-stop shop” for consumers to begin coverage.

The report found that several states are achieving this by using innovative tactics to improve consumers’ experience beyond the law’s requirements:

  • Reporting quality: Nine states plan to display data on quality in their marketplaces. This is two years before the act requires such data.
  • Increasing options: Small-business employees in state-run marketplaces will have more choices. Nearly all of these marketplaces will provide firms with the more than one plan, starting in 2014
  • Promoting insurer participation: Eight states and the District of Columbia have adopted formal rules to require or incentivize insurers to participate in the marketplaces.
  • Balancing members: Many states have taken steps beyond act requirements to encourage a balance of health and sicker people in the marketplace so that participating plans do not end up insuring mostly unhealthy people.
  • Limiting choice for ease: Insurance carriers may sell at five different tiers of coverage. But many states are limiting the number of plans an insurer can sell at each tier in order to make the choices more manageable.
  • Streamlining eligibility: Fourteen states and the District of Columbia used federal funds to adopt a one-stop shop computer system that will determine coverage potential enrollees are eligible for.
  • Improving assistance: In addition to allowing agents and brokers to sell coverage, the state exchanges are also expected to educate consumers and help them sign up for health coverage.

For more information on the state-run health exchanges, see the press release this information was taken from or the report it concerned. Also please visit the ClaimLinx Exchange as well as the interactive guide to health reform for additional resources and information.

New Flash of Optimism for Small Business Owners

A surge in confidence in July and August reached some of the highest levels since the recession started, according to a handful of recent surveys.

For example, the quarterly small-business optimism index from Wells Fargo and Gallup reached its highest level since the third quarter of 2008. Likewise the National Federation of Independent Business showed its fourth-highest index reading since December 2007.

In addition, the Wall Street Journal/Vistage Small Business CEO Survey said that of the 678 business owners surveyed, 73% expect revenues to increase in the next year and 54% expect profitability to improve.

Jim Houser, owner of Hawthorne Auto Clinic Inc., is already seeing an increase in demand for his business in Portland, Ore. His shop has consistently taken in about 15 cars per day since the recession, but the amount customer spent on repairs in an order had dropped 20% from 2007 to 2010. In recent months, though, he has seen the dollar per repair order climb back to pre-recession levels.

“I think people are no longer afraid of losing their jobs … they’re more willing to take care of their cars and buy things like tires and shock absorbers,” Houser said.

But the shift in small-business confidence may be a bit premature when considering the overall economic outlook. Though it is improving, the current economy is still far from robust, with unemployment just above 7% and gross-domestic-product growth behind the long-run average of 3.5%.

For more information, read the article by Adam Janosky this information was taken from. If you have questions about your small business insurance needs, please contact us today and we would be happy to help you!