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Archive for August, 2012

With the feeling that summer is slowly drawing to a close as back-to-school is just around the corner, I feel compelled to look further ahead to November and wonder what is to come for our country, the economy and the business environment in general.  Certainly, the results of the upcoming election will assist in shaping the future of how Healthcare Reform will transition into 2013 and beyond.  This emotionally-charged topic has generated an incredible amount of discussion, debate… and confusion. 

 

And it’s no wonder, considering the resulting legislation – which can be perceived as positive or negative, depending on which side of the fence you stand – has created a slew of new tax law changes and compliance issues for business owners and individual taxpayers alike.  In the months and years ahead, this legislation as we know it today will likely change, but most likely will not disappear in it entirety, as it is expected that certain provisions contained within the healthcare reform act will continue even in the event the act is overturned in the future.  Regulations and additional implementation guidance will be issued; new initiatives will be proposed; and those that have already passed may be adjusted or withdrawn. As professional service providers and advisors, it is imperative that our views be both bipartisan and neutral, preparing our clients for whatever may come post-election.  At this point, however, there is much more clarification to be provided by the IRS on definitions and compliance rules, so we cannot advise on too many specifics just yet.  However, we do have some guidance to share in times like these.

 

For business owners and financial executives:

The most important piece of advice we can share with our business clients is to be proactive in running a lean and mean company, focusing on the areas of employee utilization, operational efficiencies and expense cutting, getting the most value out of every dollar.  Depending on the size and structure of the business, we can assist in evaluating a variety of issues as they relate to the provisions included in the healthcare reform act.  For example, we are working with our clients who are deemed to be “large  employers” in determining advantages and disadvantages associated with the provision of minimum essential coverage versus the penalty for not providing such coverage.  For our business clients of all sizes, we are discussing issues related to healthcare reform act provisions such as the premium assistance credit, and, importantly, reporting of the aggregate cost of employer-sponsored group health coverage provided to employees on their 2012 Form W-2. 

 

For individual taxpayers:

If you are a high net worth individual, you are likely wondering what you need to do to protect yourself and your assets.  We have the resources to provide education on a cost/benefit analysis of your health insurance programs.  And we are discussing strategies to minimize the impact of a variety of surcharges including, but not limited to, upcoming changes in flexible spending accounts; the .9% hospital insurance tax on high income tax payers; and a 3.8% Medicare tax on investment income.  And don’t forget that starting in 2014 – depending on election results – the requirement for most U.S. citizens to have minimum health coverage or face an additional tax will come into play.   Additionally, our Estate & Trust professionals are not waiting until after the election to speak with the clients, but are proactively reaching out to them now to review their current financial and estate planning strategies.   Discussions include utilization of the increased gift exemption and evaluate if current investment and financial planning decisions are appropriate for their lifestyle needs and family estate planning objectives, before and after the election.

 

WS+B’s HRAT Team

In response to the healthcare reform policy and the impact it has upon businesses of all sizes, WithumSmith+Brown formed a Healthcare Reform Advisory Team (HRAT). The group is comprised of WS+B’s most seasoned healthcare and tax professionals, whose mission is to answer and address client questions and issues related to the federal policy. “Healthcare reform affects every business from every industry,” says Anthony Panico, CPA, WS+B partner and team leader of this advisory group. “Members of the Healthcare Reform Advisory Team are here to help clients navigate the rules and regulations of this policy.”  Feel free to contact Tony with questions related to healthcare reform at healthcare@withum.com.   He and the HRAT team are very knowledgeable about the subject.

 

In conclusion, our goal as ‘trusted advisors’ is to work alongside our clients as true partners, helping their business grow and thrive through good times and not-so-good times.  As during all times of significant upheaval and change, individuals and businesses of all sizes will need to seek the guidance of their professional advisors and consultants, including CPAs, who, in turn, will need to stay informed as to the changing aspects of the U.S. healthcare delivery system.

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