Here’s a List of Tax Hikes & Fees Coming With Obamacare Next Year!

December 28, 2012 by

Starting in 2014, Barack Obama’s health care law will expand coverage to some 30 million uninsured people. At the same time, insurers no longer will be allowed to turn away those in poor health, and virtually every American will be required to have health insurance — or pay a fine. Insurance will be available through an employer or a government program or by buying it on their own.

Here’s a look at some of the major taxes and fees, estimated to total nearly $700 billion over 10 years.

– Upper-income households. Starting Jan. 1, individuals making more than $200,000 per year, and couples making more than $250,000 will face a 0.9 percent Medicare tax increase on wages above those threshold amounts. They’ll also face an additional 3.8 percent tax on investment income. Together these are the biggest tax increase in the health care law.

– Employer penalties. Starting in 2014, companies with 50 or more employees that do not offer coverage will face penalties if at least one of their employees receives government-subsidized coverage. The penalty is $2,000 per employee, but a company’s first 30 workers don’t count toward the total.

– Health care industries. Insurers, drug companies and medical device manufacturers face new fees and taxes. Companies that make medical equipment sold chiefly through doctors and hospitals, such as pacemakers, artificial hips and coronary stents, will pay a 2.3 percent excise tax on their sales, expected to total $1.7 billion in its first year, 2013. They’re trying to get it repealed.

The insurance industry faces an annual fee that starts at $8 billion in its first year, 2014.

Pharmaceutical companies that make or import brand-name drugs are already paying fees; they totaled $2.5 billion in 2011, their first year.

– People who don’t get health insurance. Nearly 6 million people who don’t get health insurance will face tax penalties starting in 2014. The fines are estimated to raise $6.9 billion in 2016. Average penalty in that year: about $1,200.

– Indoor tanning devotees. The 10 percent sales tax on indoor tanning sessions took effect in 2010. It’s expected to raise $1.5 billion over 10 years.

The 28 million people who visit tanning booths and beds each year — most of them are women under 30, according to the Journal of the American Academy of Dermatology — are already paying.

Filed Under: Health Care Reform Tagged With: ,

Why Do I Need Life Insurance?

December 15, 2012 by

 

Why do I need life insurance?

 

Life insurance is about how you want to live your life right now and many years from now.  It’s also about how your loved ones will live their lives when you’re gone.  AMAC offers life insurance products through various top-rated reputable life insurance carriers to help protect what is important to you – whether it is to protect the assets you’ve worked so hard to attain, or to ease your family’s burden after you are gone.    Life insurance helps to provide peace of mind for you and your family.

To Replace Lost Income

Most people buy life insurance as a means to replace income lost if something happens to them. Providing money for survivors is important. Life insurance is the most cost effective way to do it.

To Pay Off Debt

Debt can be very burdensome to your family, especially without your income available to help repay it. Life insurance can be used to pay off debt and help create more financial security for your family.

To Pay Final Expenses and Offer an Emergency Fund

Final expenses can be very significant, especially if there are large medical bills, funeral or legal expenses to pay. An emergency fund can cover unexpected bills such as emergency repairs to your home or car. Life insurance provides cash that can be used to help your family cope in a time of distress.

To Help Pay for Your Children’s Education

Educating children can be expensive and often requires a long-term strategy. Many people plan to contribute funds each year until they have enough money saved to pay all or some of their children’s education costs. Unfortunately if something unexpectedly happens to you, there may not be enough time to set aside adequate funds for education. Life insurance can help by creating a lump-sum of cash that you can count on to help pay part of your children’s education costs.

Types of Life Insurance

Term Life:    Protects your family with a death benefit for a specific term or span of years if scheduled premiums are paid.  If you die during the policy term, your beneficiary is paid the coverage amount subject to your policy terms. Since it provides “pure” insurance without any cash value accumulation, term life insurance coverage is generally less expensive initially than permanent coverage.

Whole Life:  Considered “permanent insurance”, coverage is intended to remain in force during the Insured’s entire lifetime, providing premiums are paid as specified in the policy.  A whole life insurance policy can build cash value on a tax-deferred basis.  Both the premiums to pay and the cash values that result are predetermined and found in the policy contract.  The cash value is an amount of money available to the policy owner for policy loans or as the surrender value if the policy is canceled and returned to the company.

Universal Life:   Considered “permanent insurance”, UL policies offer a valuable death benefit and provide the opportunity to build cash values that you can borrow, or withdraw.  If your Universal Life (UL) policy is in force at the time of the insured’s death, policy proceeds will be paid in accordance with the terms of the policy to the beneficiary.  With certain limits, you can choose the premium you wish to pay and this determines how the policy values develop.    UL is also an “interest sensitive” product, which means that the interest rates credited to policy values will change over time.

 

Filed Under: Life Insurance Tagged With: ,

2013 Taxes Take Effect to Fund Healthcare Law

December 15, 2012 by

2013 Taxes Take Effect to Fund Healthcare Law

We keep hearing our politicians talking about the “fiscal cliff” and not raising taxes on the middle class, and whether or not to raise taxes on the top 2% of earners in the United States. What we are not hearing as that the middle class and the top earners are being hit on January one with several new taxes to fund the healthcare law that will be fully implemented a year from now.

Some of the taxes that go into place on January 1, 2013 are an increase in payroll tax on wages, and investment income, including, dividends, interest and capital gains.

Since affluent people tend to be more likely to have health insurance than lower income people, in a sense they will be helping to pay for health insurance for lower income families.

Employers and employees will also not be paying a Medicare tax this will be in the amount of 1.45 % of all wages earned. It will also require an additional.09% for all earners over $200,000.

Here are a list of all of the upcoming taxes that go into effect in 2013

1) Employer reporting of insurance on W-2 (PPACA page 1957)

2) Surtax on investment income (Reconciliation Act pages 87-93, this creates a new 3.8% tax on investment income including the sale of your home.

3) Hike in Medicare payroll tax (PPACA pages 2000-2003, Reconciliation Act pages 87-93)

4) Tax on Medical Device Manufacturers (PPACA pages 1980-1986) this creates a tax on medical equipment retailing over $100.

5) High Medical Bills Tax (PPACA pages 1994-1995) Currently if you have medical bills over 7.5% of your AGI you can get a deduction, now it will be 10%

6) Flex Spending Cap (FSA) (PPACA pages 2388-2389) imposes a cap of $2500

7) Elimination of Tax Deduction for employer provided RX drug coverage in co-ordination of Medicare part D (PPACA page 1994)

8) $500,000 Annual Executive Compensation limit for health insurance executives (PPACA pages 1995-2000). This limits what executives of health insurance companies can make. I find this one interesting because it is OK for the President of the American Red Cross to have a salary of $651,957 and the President of the United Nations Children’s Fund (UNICEF) to have a Salary of $1,200,000 per year.

With the “Bush Tax Cuts” expected to expire compounded with these new taxes, be prepared to pay significantly more in 2013 than you did in 2012.

Filed Under: Health Care Reform

Obama Slaps States That Don’t Comply With Obamacare.

December 8, 2012 by
“Obama Slaps States That Don’t Comply With Obamacare”
Residents of states that refuse to set up health insurance exchanges under Obamacare are set to be hit with higher premiums under new rules announced by the Health and Human Services Department. Insurance companies will be charged 3.5 percent of any premiums they sell through the federal exchanges, the department announced Friday.
And insurers are likely to pass that surcharge on to clients, leading to higher premiums.

The only states to be affected are those that refuse to set up their own exchanges because of opposition to the Patient Protection and Affordable Care Act. They are almost certain to be those under Republican control. In those states, HHS will set up the exchanges   GOP governors are taking a hard line against implementing any part of  the healthcare law, which will mean insurers in their states will need  to pay the monthly fee, The Hill reports.

Arizona Gov. Jan Brewer announced this week that her state will not set up an exchange, calling the proposal “too expensive and too risky.” Her decision brings the total of states refusing to comply with the act’s provisions up to 17.  The exchanges were supposed to be up and running in all states by 2014. HHS plans to charge insurers 3.5 percent of the premiums for each plan they sell through the federal exchange.

There are still some states that haven’t yet decided whether to set up their own exchanges or use the federal exchange option, so it’s not yet known how much money the HHS will collect from insurance companies. In addition, HHS said it might change the user fees later on as more people enroll through the exchanges.  But exchanges that don’t attract enough insurers may make the companies carry larger percentages of unhealthy and thus expensive, patients, making them appeal even less to customers.  “It is important to keep in mind that any new fees to pay for the administration of exchanges will add to the cost of coverage, and that is why the focus needs to be on reducing administrative costs, streamlining operations, and avoiding regulatory duplication that will add complexity and increase costs,” America’s Health Insurance Plans (AHIP) said in a statement on the new rules.

The regulations also show how the government plans to redistribute money to help insurers with expensive clients stay afloat, as Obamacare provides fees to help companies offset the costs of taking on numerous unhealthy patients. The Obama administration says the process is designed to make sure one insurance company doesn’t get stuck with an unhealthy risk pool.

Filed Under: Health Care Reform

Government’s Expanding Role In Providing Health Care

November 23, 2012 by

Our Government’s Expanding Role in Providing Health Care

One overarching critical question about health care reform is, “What exactly should government’s role be in the American health care system?”

This is a complex question, and your answer to this question—perhaps more than any other aspect of the issue—probably determines how you feel about the Patient Protection and Affordable Act (PPACA). Whatever else the new law does or doesn’t do, one thing is certain: It significantly changes the government’s role in U.S. health care.

Let’s consider the possibilities—all of which exist in varying degrees and combinations around the globe:

  • Minimal Role—Governments of less-developed nations often play a minimal role in regulating and providing health care.
  • Safety Regulator—For safety and health, governments at the regional or national level often license health care providers and regulate medicine and medical devices.
  • Purchaser and Partial Provider of Health Care Services—Governments, including the U.S. federal government, often provide health insurance benefits as employers. Governments may also directly provide or pay for medical services to certain groups of people, such as the elderly, active military personnel, or veterans.
  • Marketplace Regulator—In some nations, government tightly regulates the business practices of the health care system and even requires residents to purchase health insurance.
  • Primary or Sole Provider of Health Care—Elsewhere, governments operate national health care systems, often funded directly by taxation. Also known as single-payer systems, the government in these systems is the sole provider of health insurance coverage and may also manage many aspects of health care delivery. Health care providers may be government employees, and hospitals government-run.

Most Americans recognize the need for some level of medical safety regulation. It also makes sense for government agencies to provide employees with health insurance benefits, just like many private-sector employers.

Before PPACA, U.S. and state governments played the roles of safety regulator, purchaser and partial provider, and limited marketplace regulator. The new health care reform law, if fully implemented, will drastically change the government’s role in health care.

Lawmakers originally wanted the federal government to become the central provider of health insurance. As enacted, the health care law does not go this far, but it does make government into a large-scale regulator of the health care marketplace. Because PPACA threatens market-based competition, quality, and innovation, while limiting choices and options for American consumers, it is, arguably, a dramatic first step towards a single-payer system in which the government could become the sole provider of health care insurance and services.

Filed Under: Health Care Reform Tagged With: ,

Health Care Reform

November 16, 2012 by

Health Care Reform

Penalty 101: Arguably, the most critical component of the Affordable Care Act, the individual mandate requires every American to either carry health insurance or face a fine.  Last month, a Congressional Budget Office analysis estimated that 11-12 million uninsured Americans would be subject to the individual mandate, with more than half expected to pay the fine rather than obtain coverage.  What that means is that, beginning in 2014, many consumers who can afford health insurance but elect to go without, must pay penalties to the IRS when they file their taxes the following year.  And, while these penalties start off small, they ramp up to their full levels by 2016.  But, due to the inherent confusion accompanying full implementation, it is believed that more people than previously estimated may face the penalty.

 

Filed Under: Health Care Reform, Health Insurance Tagged With: , ,
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