Health Insurance and the Healthcare Reform Act II

Posted by Evelyn on Jan 10th, 2011 | 0 comments home title

As you probably know, The Health Care Reform Act requires that we all must have health insurance by 1/1/2012. This hit’s a tough spot for me because it has been difficult to take a deduction for premiums on the itemized deductions form. I’ve been doing taxes since I was in high school and its always been this way. And if you are able to take them, its very possible that you will get audited. I’ve seen it happen.

Next health insurance premiums are high. I keep asking people how much they pay and I can’t believe what I’m hearing. My husband, my daughter and I have an HSA and we pay around $500 per month with a 4500 deductible. This is one of the lowest I’ve heard. A client of mine was laid off recently and is now paying COBRA premiums. These must be the highest. They pay $600 per month for her and her husband. Unfortunately they both have health isssues that I think could be prevented if they just take care of their health. This the main reason Republicans are against this act. Insurance premiums are too high!

Since I am corporation now, I pay attention to how it affects me directly. Corporations must offer affordable health insurance. And if they don’t they will have to pay a penalty. However, if an employee does not want insurance they have to sign an affidavit saying they have been offered it an turned it down. And who do you think would do that if they already know that IRS will penalize us on our own personal tax return if we don’t. Ugh! Affordable is the key here. We all know its expensive so I can see taking a loss on that. A very expensive one.

Here’s something you want to know: There are tax advantages with health care premiums. If you’re an employee: Look to see if your employer offers a cafeteria plan. Taking as pre tax dollars allows you take it dollar for dollar without the 7.5% limit on the itemized deductions form. And if your lucky enough to have an employer who pays premiums sign up as quickly as you can. If you happen to be laid off and your health is not good, look for an employer who pays your insurance at least partly.

As an employer, look into an HSA for your employees. The premiums will be lower and it can be a great tax advantage to the employee. My husband have one through his corporation. We not only get the premiums as a deduction but we also take the deposits as a deduction on our personal tax return. We took $5000 the last two years for out of pocket expenses.

As far as the health insurance credit goes, the HSA premiums do not qualify for the health insurance tax credit.

But most importantly, take care of your health! And if you serious about it read my previous article “ How to motivate yourself to exercise!!

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