Accountant: ‘Obamacare’ riddled with unintended consequences
Businesses may cut staff hours or choose penalty over offering health insurance
NAMPA — As one local accountant put it, ‘simple’ is out the window when it comes to businesses applying the upcoming Affordable Care Act changes.
Come 2014, businesses with more than 50 employees must provide an adequate health insurance plan or pay a tax. A panel of accountants explained various parts of the 1,900-page “Obamacare” legislation during a Nampa Chamber of Commerce Business and Breakfast event Thursday.
“It could shut some businesses down, we’ve heard rumors of that,” said Trevor Gunstream, a certified public accountant with The Nichols Accounting Group. “If … you’re on the edge of being in business or not and you have to pay this penalty, you’ve got a real dilemma on your hands.”
The mandate will not apply to businesses with fewer than 50 people, he said. A benefit for those businesses, if employees earn less than $50,000, has been a tax credit if they provide health insurance. That credit, also available to nonprofits, is set to increase from 35 percent of premiums to 50 percent of premiums in 2014.
Some companies and individuals may choose to pay the penalty instead of health insurance premiums.
“These penalties aren’t enough to force people to go get health insurance, so most people are going to pay the penalty,” Ripley Doorn & Company CPA Greg Braun said.
Another possibility, Gunstream said, is that businesses will cut employees’ hours back to 29 or fewer because the health insurance mandate only applies to full-time staff.
The law is riddled with “unintended consequences” like these, Ripley Doorn CPA Bryan Crookham said.
Panel members urged business owners to meet with their advisers and understand the ins and outs of the law.
On an individual basis, it’s also important to start planning ahead if you don’t have health insurance, he said. “Every individual is going to have to comply with the act,” Gunstream said. “... Explore your options now.”
TAX CHANGES NOT JUST FOR TOP EARNERS The Bush-era tax cuts for those earning more than $250,000 are set to expire Jan. 1, and those who earn more than $200,000 — or $250,000 for a married couple — will see a new Medicare tax on investment and passive income.
But, as of now, other tax changes are coming that will impact people with lower incomes.
“A lot of people have a misconception that there are only going to be tax increases on people who make over $250,000, and that’s just not true,” Crookham said.
Higher rates for married people, for instance, are set to take effect in 2013.
“Married couples would end up paying more tax than two single people,” Crookham said.
Those with kids will get less back from the child tax credit — which is set to decrease from $1,000 per child to $500 per child.
Many people will see a cut to their takehome pay, too, as the portion taken out for Social Security is set to increase from 4.2 percent to 6.2 percent.
“There are taxes that are coming, and everybody is going to be paying a bigger share,” he said.
Here we go again, and again, and again. First off, let's take note of who is doing the naysaying here.
Nichols Accounting Group accountant Trevor Gunstream, left, is joined by Ripley Doorn & Company accountants Bryan Crookham, center, and Greg Braun to explain upcoming tax changes.
I know most of you don't know these folks, but let me explain. They are Idaho Arch Conservatives, they leaders of DOOM and GLOOM. Best of all, they are accountants who are notorious for looking for D&G for their clients.
Next, they are talking about things that haven't happened yet as if it were absolute fact. They remind me of Fox News. None of these guys have any Idea what's gonna happen when Obamacare [ACA] takes effect. They are just here to scare the living daylights out of everyone so they can look like they are important. They haven't the slightest clue what's going to happen, and truthfully, neither do I.
I do know one thing, out health care system is broken and this is a step in the right direction to the the cure. I've said this before and I'll say it again, when the inevitable happens, i.e., CHANGE [the only constant in this life], there are only two things you can do, embrace it or fight it. If you fight it, you just dig your own grave because change will walk over you every time.
These guys should know that and instead of being the EeYores of the Hundred Acre Wood, they need to take responsibility for their profession and tell us how this policy will benefit us, not tear us down. Those of us who have done business with accountants know that is, of course, not possible. They wouldn't be accountants if they did that, they would be...um... what? friends?.