Daily Archives: February 26, 2015

Playing the Obamcare game to your advantage

Tempting – Five Easy Ways To Game Obamacare.

  1. Buy None, Get Three Free (months that is)
  2. Understate Your Income
  3. Are You Sure You Use Tobacco?
  4. Buy it. Change it. Use it. Drop it.
  5. Pay The Tax for Being Uninsured

The conclusion…

As the Obamacare abyss continues, it will be more likely that people will look toward these mechanisms to avoid paying the high premiums. It should be noted that, although not all of these options are necessarily ethical, they all fall within the law.

We should also note: since when has government said anything about Obamacare it has ethically presented to the public? (emphasis added)

 

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Subsidy Verification in the ACA: Complexity Creating Taxpayer Risk

Subsidy Verification in the ACA: Complexity Creating Taxpayer Risk | Testimony | American Action Forum.

Great article by the American Action Forum exploring the complexity of the Obamacare subsidy.  The following subjects are examined:

  • Complications of the Subsidy Eligibility Provisions in the Affordable Care Act
  • The Affordable Care Act Increases Burdens on the Tax Code and on Taxpayers
  • Income Verification and Risks to the Federal Budget

The conclusion, which I agree with 100% is:

The process for verifying eligibility and receiving subsidies is far too complex to rely on such tenuous information. The enrollment period is over, and those that applied to receive subsides are currently receiving them in some form, and these individuals will be asked to provide an answer for inaccuracies in a system bound for error and fraudulent payments. Not only does this impact the taxpayer, but it could unnecessarily increase federal spending through inaccurate subsidy payments – both unintentional and fraudulent.

The additional burden of reporting health insurance status and payments through the tax filing process could create large liabilities for taxpayers, and increases the complexity of the federal tax system. The Treasury Inspector General even testified that the IRS will have difficulty implementing fraud prevention measures imposed on the agency until the system is more robust.[xxvii]

With the 2015 open enrollment season just around the corner, the administration should be ensuring that proper verification systems are in place and do away with the self-attestation honor system that leaves taxpayers liable and the encourages additional spending at the federal level. The current subsidy eligibility system places too heavy of a responsibility on the individual, the employer and the federal budget.

Wish I’d discovered this analysis sooner. It’s safe to say that the administration did little to ensure that the proper verification systems are in place.

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Treasurey makes $3 billion in Obamacare payments without authorization.

Do first, ask forgiveness later – Treasury won’t explain decision to make $3 billion in Obamacare payments | WashingtonExaminer.com.

What’s tricky is that Congress never authorized any money to make such payments to insurers in its annual appropriations, but the Department of Health and Human Services, with the cooperation of the U.S. Treasury, made them anyway.

….

The argument that annual appropriations are required to make payments is also backed up by a report from the Congressional Research Service, which has differentiated between the tax credit subsidies that Obamacare provides to individuals to help them purchase insurance, and the cost-sharing payments to insurers.

Well until Congress gets some gonads (excuse me ladies, or not…) it’s quite obvious that annual appropriations are not required.

Why do we even have a Congress with Obama as President? They are getting more and more irrelevant by the day. The scary thing is there’s “nothing wrong with that” from a Democratic perspective.

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IRS: Obamacare Penalty Exemptions

Individual Shared Responsibility Provision – Exemptions: Claiming or Reporting.

There are a myriad of ways to avoid the Obamacare penalty. No better place to go but the enforcer, the IRS.

  • Coverage considered unaffordable
  • Short coverage gap
  • Income below the return filing threshold
  • Citizens living abroad and certain noncitizens
    • must be out of country at least 330 days
  • Members of a health care sharing ministry
  • Members of Indian Tribes
  • Incarceration
  • Members of certain religious sects
  • Aggregate self-only coverage considered unaffordable
  • Gap in coverage the beginning of 2014
  • General Hardship
  • Coverage considered unaffordable based on projected income
  • Determined ineligible for Medicaid in a state that did not expand Medicaid coverage (income dependent)
  • Resident of a state that did not expand Medicaid (Income dependent)
  • Unable to renew existing coverage
  • Gap in CHIP coverage
  • AmeriCorps coverage
  • Limited benefit Medicaid and TRICARE programs that are not minimum essential coverage

Details provided at the link.

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Will Only Suckers Pay The ObamaCare Tax Penalty?

Be careful out there… Will Only Suckers Pay The ObamaCare Tax Penalty? – Investors.com.

The SRP (Shared Responsibility Payment – Ed) is a clumsy euphemism for the ObamaCare individual mandate tax penalty, which is $95 or 1% of household income, whichever is greater, for those who didn’t have insurance in 2014. That increases to the greater of $325 or 2% of income for those who don’t have insurance this year, and then to $695 or 2.5% of income the year after that.

The mandate and the tax penalty behind it are core elements of the health law, but it’s becoming increasingly apparent that they are relatively toothless. There are dozens of exemptions available, some of which require no paperwork. It can be far less complicated to avoid the ObamaCare tax penalty than pay it. And the already overworked Internal Revenue Service has little authority to collect any unpaid penalty taxes due.

This has led industry analyst Robert Laszewski to ask “is there really an individual mandate?”

And here’s how easy it is to avoid the penalty?

Penalty complexity. When filling out the new Form 1040, taxpayers can check a box indicating that they had “full-year coverage.” Anyone who checks this box doesn’t have to pay the penalty, fill out any additional forms or submit any evidence of coverage, leaving it to the IRS to determine whether they were properly insured.

Those who don’t check this “full-year coverage” box, in contrast, must locate a complicated worksheet in a separate instruction booklet to determine the size of their penalty. The worksheet requires taxpayers to indicate each month that they, their spouse or dependents didn’t have government-approved insurance, and then do a series of calculations to see what they owe.

Some tax professionals admit that there is little to keep someone from just checking the box and avoiding the extra hassle and cost of figuring out the penalty, even if they didn’t technically meet the requirement for “full-year coverage.”

All that said, my motto is “don’t mess with the IRS!”

 

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