Health Care Tax Tip: Report Life Changes to the Marketplace

Nov 16, 2015

If you are enrolled in insurance coverage through a government Health Insurance Marketplace, it is particularly important you report changes in circumstances to the Marketplace to prevent unwelcomed surprises when your tax return is prepared. Plans and prices change every year and you may find a new health care plan that’s more affordable or works better for you, especially if your expected income or household for 2016 will change.

Reporting the changes will help you avoid having too much or not enough premium assistance paid to reduce your monthly health insurance premiums. Getting too much premium assistance means you may owe additional money or get a smaller refund when you file your taxes. On the other hand, getting too little could mean missing out on monthly premium assistance that you deserve.

Changes in circumstances that you should report to the Marketplace include:

  • Healthcare_RecordsMarriage or divorce
  • Birth or adoption of a child
  • Changes in income
  • Getting health coverage through a job or a program like Medicare or Medicaid
  • Changing your place of residence
  • Having a change in disability status
  • Gaining or losing a dependent
  • Other changes that may affect your income and household size

There is still time left this year to report changes. Update your income and household information by December 15, 2015. This will ensure any changes to your savings and plan take effect January 1, 2016.

By: Katie Mokry, Senior Accountant

Categories: Healthcare & Dentistry


Don’t Leave Health Care Dollars on the Table

Nov 13, 2015

Don’t make the mistake of waiting until the end of December to review your finances. You might not have enough time to take full advantage of some money-saving strategies before the ball drops. Here are some healthy yearend moves you may be able to make.

image

Check your deductibles

Many health insurance plans have an annual deductible. If you’ve already met yours for the year, now’s the time to schedule any elective procedures you’ve been considering. If it doesn’t look like you’re going to meet your deductible this year, then switch gears and push any non-urgent visits into next year. That might help youmeet your deductible in 2015.

Max out your benefits

Be sure to take advantage of any benefits your health plan provides you free of charge. For example, it may cover an annual physical and various screenings.

If your employer sponsors a wellness program, don’t wait until the end of the year to check your status. You may be eligible for additional rewards for doing something as simple as scheduling a screening.

Review your FSA

If you have a health flexible spending account (FSA) through your employer, check your balance. If you have more money in your account than you can spend by the end of the year, see if the plan offers a grace period so employees can spend down their funds. Or the plan may allow employees to carry over a certain amount to the next year. Find out if your employer offers one of these options.

Tax tips

If you usually itemize deductions on your tax return, you may want to brush up on the details about the medical expense deduction. You won’t be able to qualify for it until your expenses are over 10% of your adjusted gross income (7.5% if you or your spouse is 65 or older). If you’re close to reaching the threshold, it may influence the decisions you make about elective procedures. You can only deduct unreimbursed medical expenses that exceed the threshold.

Categories: Healthcare & Dentistry


Affordable Care Act: Reporting Coverage

Nov 13, 2015

Healthcare_PolicyUnder the Affordable Care Act, any entity providing minimum essential health coverage to individuals must report such coverage to the IRS and to the covered individual. Information reporting was voluntary for 2014; no one was required to file. However, the first information reporting returns are due to be filed in 2016 covering the 2015 year. Required employers that are “applicable large employers” (ALE) and employers of any size who maintain self-insured health plans will have to report their 2015 coverage to the government.

Generally, an employer will look to its employment numbers for 2014 to determine if it is an ALE for 2015. If the employer had at least 50 full-time employees, including full-time equivalent employees, during 2014, it will be considered an ALE for 2015.

Those required to file information returns will need to report information including:

  • The name, address, and employer ID number of the provider
  • The responsible individual’s name, address, and taxpayer ID number
  • The name and taxpayer ID number of every individual covered under the policy (employee, spouse, and dependents) and the specific months for which each individual was enrolled in coverage
  • For coverage under a group health plan, the name, address, and EIN of the employer sponsoring the plan; the SHOP plan’s identifier number, if applicable
  • Name and phone number of the provider’s designated contact person

Employers should be taking steps now to prepare for the upcoming filing season. In most cases, the health insurance carriers or issuers will prepare and file the necessary forms. Employers should be having discussions now with their carriers to verify filing responsibility. Those with self-insured plans will need to review their personnel records to ascertain they have all the required information. If an employer utilizes the services of a third-party payroll service, it should make sure all the information is available. Employers will also need to obtain monthly counts of full-time employees and total employees, and how many of these were offered coverage. Special rules apply where an employer offers a group medical plan and a separate Health Reimbursement Account (HRA).

The IRS has issued forms designated as 1094 and 1095 to be used to report the health insurance information. Forms must be filed with the IRS by Feb 29, 2016; employees must be furnished their forms by Feb 1, 2016. Filers with more than 250 forms must file electronically with the IRS. Don’t wait until early next year to start reviewing your records—make sure you can capture the necessary information from your payroll system now to avoid unnecessary problems later!

By: George Monger, CPA

Categories: Healthcare & Dentistry


Patient Credit Balances And Unclaimed Funds

Nov 12, 2015

An important customer service function for your Office Manager is to check to see if any patients have Credit Balances. This should be done on a regular basis. Having it as part of your month-end procedures is a good way to ensure it doesn’t get overlooked. Part of providing excellent customer service is returning a payment when due with an explanation of the refund. One of the easiest ways to determine these amounts is to run an aging report and look for all credit balances, especially those over 30 days.

Money5The State of Ohio requires any patient refunds older than three years and not returned to the patient, be remitted to the State of Ohio with your annual Unclaimed Funds Return. November 1st of every year is the reporting date for many states, including Ohio; March 1st is the second most common due date. Section 169.11 of the Ohio Revised Code allows for the early reporting of unclaimed funds for businesses that wish to clear their accounts.

There is typically no minimum amount that must be reported and transferred, but unclaimed funds totaling less than $50 may be aggregated, as is permitted in Ohio. (ORC Sec.169.07 Holder of unclaimed funds held harmless.)

According to ORC Sec. 169.07(A), “Upon the payment of unclaimed funds to the director of commerce … the holder will be relieved of further responsibility for the safekeeping thereof and will be held harmless by the state from any and all liabilities for any claim arising out of the transfer of such funds to the state.”

Unclaimed Funds Audits have been hitting more and more medical and dental practices. Handling credit balances properly is just one way you can run a successful dental practice.

Categories: Healthcare & Dentistry


Tax Planning: Recent Legislation Effects on Social Security

Nov 11, 2015

Miscellaneous_Time8Tax planning is always a helpful tool throughout the year, especially towards year-end. Each year accountants assist their clients with strategies to help ease the tax burden from Uncle Sam. The constant changing tax code and new legislation brought to you by our friends in Washington, sometimes is enough to make a taxpayer’s head spin. This year is no different.

On November 2, 2015, the Bipartisan Budget Act of 2015 was signed into law by President Obama. While this legislation doesn’t appear to deal with taxation issues on the surface, there are several items that were written into this law that are unrelated to the law’s actual intent.

One of these new provisions which comes into play with this new two-year deal limits a couple of planning strategies that were used by those benefiting from Social Security income.

Here’s a small summary for those that may be affected by this change:

  • Those that would benefit from the ‘file and suspend’ strategy. Listen up. This strategy has been eliminated by this Act being signed into law. “File and suspend” refers to when one of the taxpayers files for retirement benefits after reaching full retirement age and then they choose to turn around and suspend those newly requested benefits. This would in turn enable their spouse to be able to apply for spousal benefits. Effective in six months for new ‘file and suspend’ claims, if a taxpayer decides to hold off on receiving their Social Security benefits, neither the taxpayer or spouse can receive spousal benefits during that period. Since this is only affecting new claims after the effective date, those still considering doing this have six months to implement this strategy.
  • An additional strategy that has also been eliminated with this Act deals with one of the taxpayers filing for spousal benefits initially and then changing to receive their own, potentially more lucrative, benefit later by delaying their application for their retirement benefits. This strategy will still be available for those who are 62 on or before December 31, 2015.

The tax code is constantly changing and this is just one of many items that could affect how you wealth and tax plan for the future. If you have questions or require assistance is making sure you have an optimum tax strategy, give us a call at (419) 891-1040.

By: Jill Blakeman, CPA

Categories: Healthcare & Dentistry