health insurance

August 15 2017

Have adult children? Take steps to avoid medical access denial

Health Insurance, Individual Taxes business, deductions, Education, health insurance

Imagine your college-aged daughter has an accident while away at school and ends up in the emergency room. When you call the hospital, you are denied information about her care because you do not have the proper forms signed. Under the Health Insurance Portability and Accountability Act (HIPAA), you do not have legal access to your child’s health information after they reach age 18, even if your child is still your dependent and their health insurance coverage is in your name. To avoid this administrative nightmare, take the following steps.

1. Make sure your health insurance coverage will cover your child at his or her new campus home.

2. Have your son or daughter sign a HIPAA authorization form allowing you access to their medical information.

3. Create a multipurpose medical power of attorney authorization, which will not only give you authorization to help make medical decisions, it can also include an advance directive or living will.

4. Scan two copies of these documents – one for you and one for your child –and keep them in a secure place along with a copy of your student’s insurance card.

August 6 2017

Your HSA as a retirement tool – the facts

Health Insurance, Individual Taxes, IRS Rules deductions, health contribution, health insurance, HSA contribution, HSAs

Health Savings Accounts (HSAs) are a great way to pay for medical expenses, and since unused funds roll over from year to year, the account can also provide a source of retirement funds in addition to other plans like 401(k)s or IRAs. But be aware of how HSAs compare to other retirement investment tools.

HSAs work best when they are used to pay for qualified medical expenses. Neither your original contributions to an HSA nor your investment earnings are taxed when used this way. There is no required minimum distribution after you reach age 70½, like there is with 401(k)s and IRAs. You can only contribute to an HSA if you have a high deductible health insurance plan.

The downside of these plans is that you pay more out of pocket each year when you need to use health services. Annual contributions to HSAs are limited to $3,400 a year for individuals and $6,750 a year for families (add $1,000 for people aged 55 or older). HSAs typically have fewer investment options compared with other investment tools including 401(k)s and IRAs. They also often have high management and administrative fees.

Before you reach age 65, non-medical withdrawals from HSAs come with a whopping 20 percent penalty, plus they are taxed as income. Even after age 65, both contributions and earnings are taxed when they are withdrawn for non-medical expenses. In this way, HSAs compare unfavorably with 401(k)s and IRAs, which end their early withdrawal period earlier, at age 59½. They also have lower early withdrawal penalties of just 10 percent.

HSAs are a powerful tool to help manage the ever-rising costs of health care. Knowing the rules and the costs associated with them can help you position an HSA with your other retirement options.

March 20 2017

Current tax law requires health insurance

Health Insurance, Individual Taxes, Money Management, Tax Break, Tax Law, Tax Planning deductions, health insurance, Tax Planning

During his first week in office, President Trump signed an executive order asking federal agencies to reduce the economic burden the Patient Protection and Affordable Care Act (ACA) puts on American citizens.

Unfortunately, this executive order is causing confusion. Many people are left wondering if fines will no longer be imposed or rules no longer need to be followed. Until the agencies impacted by this executive order publish their intent, act as though current laws are still in play. This includes:

The requirement to have health insurance.
The requirement to pay a shared responsibility tax if you do not have continuous health insurance coverage.
The ability to receive a health insurance premium credit if you qualify.
Possible health insurance credits for qualifying small businesses.

It’s important to realize that unless tax laws actually change, you are expected tofollow the laws as they are currently written.

March 15 2017

What to do when receiving Form 1095

Health Insurance, Individual Taxes, Tax Law, Tax Tips form 1095, health insurance, Tax Filing, Tax Planning

If you have health insurance through a state or federal marketplace, you will receive a Form 1095-A. You should have already received this form, and you must have it prior to filing your tax return.
If you receive health insurance through your employer, or another program that generates Form 1095-B or 1095-C, for 2016 only, you can still file a tax return without receiving the form. Just make sure you can prove health insurance coverage for you, your spouse, and your dependents for the year.
Place Form 1095 in your tax files. Even though some Forms 1095-B and Forms 1095-C will be received later, you must still retain the form in your files.
If you file your tax return and then discover an error in your reporting based on a Form 1095-B or Form 1095-C received after February 1, there is penalty relief from the IRS if you need to amend your tax return.

Remember, this applies to the 2016 tax year only. For the 2017 tax year, unless changed, you will be required to use a Form 1095 as proof of health insurance priorto filing your tax return.

March 10 2017

2016 proof of health insurance: the Form 1095 wrinkle

Health Insurance, IRS Rules, Tax Law, Tax Planning ACA, health insurance, Tax Planning

Under the current Affordable Care Act (ACA), all Americans must have health insurance. If you receive your health insurance through the ACA marketplace or from your employer, you will receive a Form 1095. This form is used as documentation that you have adequate insurance and is used for other ACA reporting and potential tax benefits.

January 10 2017

IRS extended the due date for Forms 1095

Individual Taxes, IRS Rules, Tax Break, Tax Law health insurance, IRS, tax breaks, Tax Filing, taxes

When you’re an applicable large employer (generally, when you employ 50 or more full-time workers and equivalents), you’re required to provide information about health coverage to the IRS and to your employees. The IRS extended the date on which two of these forms are due to your employees. Instead of being due January 31, Form 1095-B, Health Coverage , and Form 1095-C, Employer Provided Health Insurance Offer and Coverage, are now due March 2, 2017. There is no change to the February 28, 2017, due date for filing paper forms with the IRS, nor the March 31, 2017, due date for filing electronically.

May 21 2014

Health insurance credit increases for 2014

business, Credit, health insurance, Year: 2014

You may not have taken the health insurance premium credit for your small business in past years. (It’s been available since 2010.) But you might want to consider taking it this year. For 2014, the credit increases from 35% to 50%. When you qualify, you can use the credit to offset your income tax liability by up to 50% of the cost of the health insurance premiums you pay for your employees.

For details on eligibility requirements, contact our office.

Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in the McLean and Tysons Corner, VA. Gilliland & Associates specializes known for our superior knowledge and aggressive interpretation and application of tax laws, we help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+ <https://plus.google.com/108764776146415485651/posts> , LinkedIn <http://www.linkedin.com/in/gillilandcpa> , Facebook <https://www.facebook.com/gillilandcpa> , and Twitter <https://twitter.com/dnggcpa>

April 30 2014

More changes made to Affordable Care Act deadlines

Companies, health insurance, Treasury

On February 10, 2014, the Treasury Department issued rules that will allow mid-sized businesses to delay for one year the requirement to provide health insurance for their workers. The rules also offered some relief for larger companies.

Businesses with 50 to 99 employees will now have until January 1, 2016, to provide minimum, affordable health insurance to their employees, or face penalties. Previously, the deadline for meeting this requirement was January 1, 2015.

In order to qualify for this extension, employers must certify that they have not laid off employees in order to come under the 100 employee threshold.

Larger employers – those with 100 or more full-time employees – will be allowed to phase in the required health insurance coverage. These companies won’t owe a penalty under the insurance mandate so long as they offer coverage to at least 70% of their full-time employees by January 1, 2015, and at least 95% by 2016.

March 10 2014

Health care mandate extended

Businesses, health insurance, Treasuty Department

Rules just issued by the Treasury Department give a one-year extension to the health insurance mandate for mid-sized businesses. Companies with 50 to 99 employees will now have until January 1, 2016, to provide health insurance for employees or face penalties. Employers must certify that they have not cut workers in order to come under the 100 employee threshold. Companies with 100 or more employees must still meet the January 1, 2015, deadline for providing health insurance coverage.

February 26 2014

Health insurance tax credits are good medicine for small businesses

employee, health insurance, nonprofit, Small businesses

Small businesses may be missing out on an important new tax perk related to health insurance. And the stakes are even higher in 2014.

The Affordable Care Act provides a tax incentive for small business owners who pay at least a portion of their employees’ health insurance. This year as much as 50% (up from 35% in 2013) of the employer’s cost for worker health care premiums can be deducted as a tax credit. That’s a dollar-for-dollar reduction in your 2014 tax bill. But as with most tax deals, you must meet certain requirements to qualify.

First, you must employ fewer than 25 full-time equivalent (FTE) employees. A half-time employee would count as a .5 FTE, so you must consider all workers in your calculation. The fewer FTE employees you have, the higher the tax credit percentage.

Second, the average annual wages of your employees must be less than $50,000. To make the calculation, you would take your total wages and divide by the FTE number you figured above. In most cases the owner’s salary is not included in the formula.

Finally, the business owner must contribute at least 50% of the total cost for single coverage. Family coverage is not factored in. The policy must also be purchased through the Small Business Health Options Program, or SHOP to be eligible for the credit.

A few more wrinkles: if a business doesn’t owe tax for the current year, they can apply the credit to past or future years. In addition, the excess of the employer’s actual cost of health insurance over and above the credit received can still be deducted as a business expense. And the new rules also mean that small nonprofit organizations can receive a tax credit of up to 35% of their health insurance costs if they meet the above requirements.