Not only is this Health care Insurance Tax Act going to be very taxing, it is also going to be very "taxing" [taxing, something that burdens or strains.] The costs involved in this affordable care law could probably pay for enough doctors and nurses to take care of all our needy citizens.

Look at SEC. 1502 and just imagine how many new jobs are being created here: accountants, secretaries, filling clerks, lawyers, data processors, human resources assistants, paper manufacturers, optometrists, psychiatrists, marriage councilors, it just boggles my mind.    

 SEC. 1502. REPORTING OF HEALTH INSURANCE COVERAGE.

(a) IN GENERAL.—Part III of subchapter A of chapter 61 of the Internal Revenue Code of 1986 is amended by inserting after subpart C the following new subpart:

‘‘Subpart D—Information Regarding Health Insurance Coverage

‘‘Sec. 6055. Reporting of health insurance coverage.

‘‘SEC. 6055. REPORTING OF HEALTH INSURANCE COVERAGE.

 Yes, the ACT/Law repeats this title, once in small print, once in all caps.

‘‘(a) IN GENERAL.—Every person who provides minimum essential coverage to an individual during a calendar year shall, at such time as the Secretary [Not sure if that is the Secretary of Health and Human Services or the Secretary of the Treasury.] may prescribe, make a return described in subsection (b).

‘‘(b) FORM AND MANNER OF RETURN.—

‘‘(1) IN GENERAL.—A return is described in this subsection

if such return—

‘‘(A) is in such form as the Secretary may prescribe, and

‘‘(B) contains—

‘‘(i) the name, address and TIN of the primary insured and the name and TIN of each other individual obtaining coverage under the policy,

‘‘(ii) the dates during which such individual was covered under minimum essential coverage during the calendar year,

‘‘(iii) in the case of minimum essential coverage which consists of health insurance coverage, information concerning—

‘‘(I) whether or not the coverage is a qualified health plan offered through an Exchange established under section 1311 of the Patient Protection and Affordable Care Act, and

‘‘(II) in the case of a qualified health plan, the amount (if any) of any advance payment under section 1412 of the Patient Protection and Affordable Care Act of any cost-sharing reduction under section 1402 of such Act or of any premium tax credit under section 36B with respect to such coverage, and

‘‘(iv) such other information as the Secretary may require.

‘‘(2) INFORMATION RELATING TO EMPLOYER-PROVIDED COVERAGE.—

If minimum essential coverage provided to an individual under subsection (a) consists of health insurance coverage of a health insurance issuer provided through a group health plan of an employer, a return described in this subsection shall include—

‘‘(A) the name, address, and employer identification number of the employer maintaining the plan,

‘‘(B) the portion of the premium (if any) required to be paid by the employer, and

‘‘(C) if the health insurance coverage is a qualified health plan in the small group market offered through an Exchange, such other information as the Secretary may require for administration of the credit under section 45R (relating to credit for employee health insurance expenses of small employers).

‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVIDUALS WITH RESPECT TO WHOM INFORMATION IS REPORTED.—

‘‘(1) IN GENERAL.—Every person required to make a return under subsection (a) shall furnish to each individual whose name is required to be set forth in such return a written statement showing—

‘‘(A) the name and address of the person required to make such return and the phone number of the information contact for such person, and

‘‘(B) the information required to be shown on the return with respect to such individual.

‘‘(2) TIME FOR FURNISHING STATEMENTS.—The written statement required under paragraph (1) shall be furnished on or before January 31 of the year following the calendar year for which the return under subsection (a) was required to be made.

‘‘(d) COVERAGE PROVIDED BY GOVERNMENTAL UNITS.—In the case of coverage provided by any governmental unit or any agency or instrumentality thereof, the officer or employee who enters into the agreement to provide such coverage (or the person appropriately designated for purposes of this section) shall make the returns

and statements required by this section.

‘‘(e) MINIMUM ESSENTIAL COVERAGE.—For purposes of this section, the term ‘minimum essential coverage’ has the meaning given such term by section 5000A(f).’’.

(b) ASSESSABLE PENALTIES.—

(1) Subparagraph (B) of section 6724(d)(1) of the Internal Revenue Code of 1986 (relating to definitions) is amended by striking ‘‘or’’ at the end of clause (xxii), by striking ‘‘and’’ at the end of clause (xxiii) and inserting ‘‘or’’, and by inserting after clause (xxiii) the following new clause:

‘‘(xxiv) section 6055 (relating to returns relating to information regarding health insurance coverage), and’’.

(2) Paragraph (2) of section 6724(d) of such Code is amended by striking ‘‘or’’ at the end of subparagraph (EE), by striking the period at the end of subparagraph (FF) and inserting ‘‘, or’’ and by inserting after subparagraph (FF) the following new subparagraph:

‘‘(GG) section 6055(c) (relating to statements relating to information regarding health insurance coverage).’’.

(c) NOTIFICATION OF NONENROLLMENT.—Not later than June 30 of each year, the Secretary of the Treasury, acting through the Internal Revenue Service and in consultation with the Secretary of Health and Human Services, shall send a notification to each individual who files an individual income tax return and who is not enrolled in minimum essential coverage (as defined in section 5000A of the Internal Revenue Code of 1986). Such notification shall contain information on the services available through the Exchange operating in the State in which such individual resides.

(d) CONFORMING AMENDMENT.—The table of subparts for part III of subchapter A of chapter 61 of such Code is amended by inserting after the item relating to subpart C the following new item:

‘‘SUBPART D—INFORMATION REGARDING HEALTH INSURANCE COVERAGE’’.

(e) EFFECTIVE DATE.—The amendments made by this section shall apply to calendar years beginning after 2013.

 Shakespeare wrote, "that which we call a rose would smell as sweet by any other name."   I have a new name for the  ‘‘Patient Protection and Affordable Care Act’’

The Federal Health Care Insurance 

Regulatory Tax Act

Last I blogged about the taxes added or modified in the Health Care Act.  I promised I would next address the penalties.  There are 132 instances of the word "penalty" in the Act.  The first one I came upon was in

PATIENT PROTECTION AND AFFORDABLE CARE ACT

SECTION 1

TITLE I—QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS

….

  Subtitle B—Immediate Actions to Preserve and Expand Coverage

….

    SEC. 1104 ADMINISTRATIVE SIMPLIFICATION

….

 

 Before I list this section on Penalties let me point out that this is section j.  After section j I have included section h (which is two sections earlier) since it is the section that describes what the penalties are for.  Here it comes.

 (j) PENALTIES—

      (1) PENALTY FEE—

(A) IN GENERAL—Not later than April 1, 2014, and annually thereafter, the Secretary shall assess a penalty fee (as determined under subparagraph (B)) against a health plan that has failed to meet the requirements under subsection (h) with respect to certification and documentation

of compliance with—

 (i) the standards and associated operating rules described under paragraph (1) of such subsection; and

 (ii) a standard (as described under subsection (a)(1)(B)) and associated operating rules (as described under subsection (i)(5)) for any other financial and administrative transactions.

(B) FEE AMOUNT—Subject to subparagraphs (C), (D), and (E), the Secretary shall assess a penalty fee against a health plan in the amount of $1 per covered life until certification is complete. The penalty shall be assessed per person covered by the plan for which its data systems for major medical policies are not in compliance and shall be imposed against the health plan for each day that the plan is not in compliance with the requirements under subsection (h).

 (C) ADDITIONAL PENALTY FOR MISREPRESENTATION.—A health plan that knowingly provides inaccurate or incomplete information in a statement of certification or documentation of compliance under subsection (h) shall be subject to a penalty fee that is double the amount that would otherwise be imposed under this subsection.

 (D) ANNUAL FEE INCREASE.—The amount of the penalty fee imposed under this subsection shall be increased on an annual basis by the annual percentage increase in total national health care expenditures, as determined by the Secretary.

 (E) PENALTY LIMIT—A penalty fee assessed against a health plan under this subsection shall not exceed, on an annual basis—

 (i) an amount equal to $20 per covered life under such plan; or

 (ii) an amount equal to $40 per covered life under the plan if such plan has knowingly provided inaccurate or incomplete information (as described under subparagraph (C)).

 (F) DETERMINATION OF COVERED INDIVIDUALS—The Secretary shall determine the number of covered lives under a health plan based upon the most recent statements and filings that have been submitted by such plan to the Securities and Exchange Commission.

 (2) NOTICE AND DISPUTE PROCEDURE.—The Secretary shall establish a procedure for assessment of penalty fees under this subsection that provides a health plan with reasonable notice and a dispute resolution procedure prior to provision of a notice of assessment by the Secretary of the Treasury (as described under paragraph (4)(B)).

 (3) PENALTY FEE REPORT.—Not later than May 1, 2014, and annually thereafter, the Secretary shall provide the Secretary of the Treasury with a report identifying those health plans that have been assessed a penalty fee under this subsection.

 (4) COLLECTION OF PENALTY FEE—

 (A) IN GENERAL.—The Secretary of the Treasury, acting through the Financial Management Service, shall administer the collection of penalty fees from health plans that have been identified by the Secretary in the penalty fee report provided under paragraph (3).

 (B) NOTICE.—Not later than August 1, 2014, and annually thereafter, the Secretary of the Treasury shall provide notice to each health plan that has been assessed a penalty fee by the Secretary under this subsection. Such notice shall include the amount of the penalty fee assessed by the Secretary and the due date for payment of such fee to the Secretary of the Treasury (as described in subparagraph (C)).

 (C) PAYMENT DUE DATE.—Payment by a health plan for a penalty fee assessed under this subsection shall be made to the Secretary of the Treasury not later than November 1, 2014, and annually thereafter.

 (D) UNPAID PENALTY FEES.—Any amount of a penalty fee assessed against a health plan under this subsection for which payment has not been made by the due date provided under subparagraph (C) shall be—

 (i) increased by the interest accrued on such amount, as determined pursuant to the under-payment rate established under section 6621 of the Internal Revenue Code of 1986; and

 (ii) treated as a past-due, legally enforceable debt owed to a Federal agency for purposes of section 6402(d) of the Internal Revenue Code of 1986.

 (E) ADMINISTRATIVE FEES.—Any fee charged or allocated for collection activities conducted by the Financial Management Service will be passed on to a health plan on a pro-rata basis and added to any penalty fee collected from the plan.

 (h) COMPLIANCE—

 (1) HEALTH PLAN CERTIFICATION.—

 (A) ELIGIBILITY FOR A HEALTH PLAN, HEALTH CLAIM STATUS, ELECTRONIC FUNDS TRANSFERS, HEALTH CARE PAYMENT AND REMITTANCE ADVICE.—Not later than December 31, 2013, a health plan shall file a statement with the Secretary, in such form as the Secretary may require, certifying that the data and information systems for such plan are in compliance with any applicable standards (as described under paragraph (7) of section 1171) and associated operating rules (as described under paragraph (9) of such section) for electronic funds transfers, eligibility for a health plan, health claim status, and health care payment and remittance advice, respectively.

 (B) HEALTH CLAIMS OR EQUIVALENT ENCOUNTER INFORMATION, ENROLLMENT AND DISENROLLMENT IN A HEALTH PLAN, HEALTH PLAN PREMIUM PAYMENTS, HEALTH CLAIMS ATTACHMENTS, REFERRAL CERTIFICATION AND AUTHORIZATION.—

Not later than December 31, 2015, a health plan shall file a statement with the Secretary, in such form as the Secretary may require, certifying that the data and information systems for such plan are in compliance with any applicable standards and associated operating rules for health claims or equivalent encounter information, enrollment and disenrollment in a health plan, health plan premium payments, health claims attachments, and referral certification and authorization, respectively. A health plan shall provide the same level of documentation to certify compliance with such transactions as is required to certify compliance with the transactions specified in subparagraph (A).

 (2) DOCUMENTATION OF COMPLIANCE.—A health plan shall provide the Secretary, in such form as the Secretary may require, with adequate documentation of compliance with the

standards and operating rules described under paragraph (1). A health plan shall not be considered to have provided adequate documentation and shall not be certified as being in compliance with such standards, unless the health plan—

 (A) demonstrates to the Secretary that the plan conducts the electronic transactions specified in paragraph (1) in a manner that fully complies with the regulations of the Secretary; and

 (B) provides documentation showing that the plan has completed end-to-end testing for such transactions with their partners, such as hospitals and physicians.

 (3) SERVICE CONTRACTS.—A health plan shall be required to ensure that any entities that provide services pursuant to a contract with such health plan shall comply with any applicable certification and compliance requirements (and provide the Secretary with adequate documentation of such compliance) under this subsection.

 (4) CERTIFICATION BY OUTSIDE ENTITY.—The Secretary may designate independent, outside entities to certify that a health plan has complied with the requirements under this subsection, provided that the certification standards employed by such entities are in accordance with any standards or operating rules issued by the Secretary.

 (5) COMPLIANCE WITH REVISED STANDARDS AND OPERATING RULES.—

 (A) IN GENERAL.—A health plan (including entities described under paragraph (3)) shall file a statement with the Secretary, in such form as the Secretary may require, certifying that the data and information systems for such plan are in compliance with any applicable revised standards and associated operating rules under this subsection for any interim final rule promulgated by the Secretary under subsection (i) that—

 (i) amends any standard or operating rule described under paragraph (1) of this subsection; or

 (ii) establishes a standard (as described under subsection (a)(1)(B)) or associated operating rules (as described under subsection (i)(5)) for any other financial and administrative transactions.

 (B) DATE OF COMPLIANCE.—A health plan shall comply with such requirements not later than the effective date of the applicable standard or operating rule.

 (6) AUDITS OF HEALTH PLANS.—The Secretary shall conduct periodic audits to ensure that health plans (including entities described under paragraph (3)) are in compliance with any standards and operating rules that are described under paragraph (1) or subsection (i)(5).

Yes indeed, I can see how this "simplifies" the whole health care insurance business.  (This is all found in Sec. 1104, ADMINISTRATIVE SIMPLIFICATION.) And it will surely make our health care insurance premiums go down.  I bet there are all sorts of groups who just can not wait to get into the health care insurance business. 

HAPPY INDEPENDENCE DAY

 HAPPY INDEPENDENCE DAY


My curiosity has gotten the better of me.  After hearing that the Supreme Court ruled that the Affordable Health Care Act could stand the Constitutional test based upon the Government's powers to tax, I had to take another look. The section is TITLE IX.  WOW!  This section doesn't go into the individual penalty.  There are over 100 references to "penalties" within the Act.  Guess what my next post will be.


TITLE IX—REVENUE PROVISIONS
Subtitle A—Revenue Offset Provisions

EXCISE TAX ON HIGH COST EMPLOYER-SPONSORED HEALTH COVERAGE

Beginning with tax year 2013 and increasing in subsequent years

A tax of 40% of health insurance cost if over

individual     $675 per month
family        $1917 per month

Unless you live in one of the 17 states that the Secretary of Health and Human Services determines to be a "High Cost" state, then it's different.

If you have trouble following that, don't worry, your employer will keep track of it and report to the IRS.

Well, I guess the employer will have to keep track of this every month to see if a tax is due, even if it isn't.

Oh, yes, the health insurance costs by the employer will be included on your W2 so it will be easy for you to find at tax time.


TAXES ON FAILURES BY HOSPITAL ORGANIZATIONS

If a hospital is run as a non-profit/charity and it doesn't file all the required (yet to be determined) paper work, that will cost them $50,000.  Personally, I think it would cost more than that tax for the accountants to keep track of it.

The next three are so convoluted that I am not sure anyone can tell you what they tax, or how much.


IMPOSITION OF ANNUAL FEE ON BRANDED PRESCRIPTION
PHARMACEUTICAL MANUFACTURERS AND IMPORTERS

IMPOSITION OF ANNUAL FEE ON MEDICAL DEVICE MANUFACTURERS
AND IMPORTERS

IMPOSITION OF ANNUAL FEE ON HEALTH INSURANCE PROVIDERS

But the list goes on


ELIMINATION OF DEDUCTION FOR EXPENSES ALLOCABLE TO MEDICARE PART D SUBSIDY

MODIFICATION OF ITEMIZED DEDUCTION FOR MEDICAL EXPENSES

Deductible medical expenses were deductible if they exceeded 7.5% of your AGI, now it is if they exceed 10% of your AGI.

LIMITATION ON EXCESSIVE REMUNERATION PAID BY CERTAIN HEALTH INSURANCE PROVIDERS

OK, I need a CPA for this one.

ADDITIONAL HOSPITAL INSURANCE TAX ON HIGH-INCOME TAXPAYERS

Take that you 1%ers.

IMPOSITION OF TAX ON ELECTIVE COSMETIC MEDICAL PROCEDURES

Take that Hollywood; add 5% for your Uncle.

EXCLUSION OF HEALTH BENEFITS PROVIDED BY INDIAN TRIBAL GOVERNMENTS

OK, they're excluded, but what if they own a couple of those casinos and are in that 1%