Table of Contents introduction & vocabulary 2
Health Insurance Exclusions
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Health Insurance ExclusionsHealth Insurance Exclusions for employer-provided health insurance is the most costly individual tax incentive § 106—insurance plans that employers provide are excludable—no cap on spending amounts § 105—decides which payments can be excluded and which ones must be included in income—§ 213 determines which types of health care are deductible § 105(a) include health insurance payments § 105 (b) exclude this specific list of health insurance payments (will single out specific procedures or payments and leave something like cosmetic surgery as income) excludable medical expenses listed under § 213 § 104 equivalent of § 105 for pay on your own plans—allows you to exclude compensation for injuries or sickness—can you ever get health insurance tax benefits if your employer doesn’t pay for your health insurance? § 162(l)—self-employed can get an itemized deduction if premiums are greater than 2% What if you’re employed but buy your own health insurance? Could claim § 213—only to the extent that medical expenses are more than 7.5% Medicare/Medicaid—don’t pay taxes
Why are tax benefits for employer provided health care bad? Lock-in to jobs—would stay in a job for employer-sponsored health insurance Only covers people in employer sponsored plans (ESI) Why are tax benefits for employer provided health care good? Employees may underestimate their ability to get sick Not everyone values health care properly—for this to work, you have to be able to do a wage trade-off between wages and health coverage Adverse selection of having insurance companies cover high-risk individuals Drives up cost for all insured Risk pooling—the more people you get randomly the less likely they will each be systematically sick Good for society—if people are covered by their employer they are less likely to rely upon the government Non discrimination rules—intended effect: highly compensated employees and least highly compensated get the same health care highly compensated employees insist on good health care plans and blue collar employees benefit implicitly Moral hazard—because exclusion is uncapped it incentivizes expensive plans with low deductibles—why should this go only to employer provided insurance? If we had no § 106 what would the effects? More employer provided health insurance More lock-in—employees won’t move to ensure health insurance Provided plans would be more generous with § 106 we have more health insurance How could we improve this? Group people in different ways—through a union or professional association Cap the exclusions—only applies to insurance that costs less than any set amount Restructure provider compensation Are tax-exempt bonds (§ 103) a tax expenditure? Which individuals would benefit? Corporate bonds pay 10%—NYC bonds pay 7.5% if everyone had a 25% MTR—NYC would get all the benefit (two options would be worth the same to consumer) for customers who have greater than 25% MTR if they buy NYC bonds the customer would capture some of the benefit for customers who have less than 25% MTR they would marginally lose by purchasing NYC bonds and should buy Corporate bonds **tax-exempt entities should NOT buy state or local bonds because they won’t take advantage of the tax exemption for NYC IF Corporate bonds pay 10%--NYC bonds pay 8% NYC sell bonds for 10% (same effect for taxpayers as corporate bonds) and have the government directly pay NYC 2% Tax credit bonds--§ 54(a) and 54(a)(a)—used to only be for certain energy conservation and educational efforts—stimulus expanded by implementing “Build America Bonds”—these reduce the borrowers’ interest rates by 80-100 basis points currently Corporate bonds pay 10%, NYC pays 8%, Build America Bonds pay 7% Build America bonds can be issued by states predicated on their unemployment rate as a means to raise capital for the state Corporate bond pays 10% to bond holder—NYC pays 7.5% and the bondholder gets 1/3 refundable tax credit = 2.5% gets the same 10% benefit from corporate and NYC bond Health CareIssues with the current system: No universal health care More health insurance High health care costs Shift non-group to employer coverage Low health insurance if we encourage pooling—only available to some Why only to employers? Reform options: Regulate insurers—require them to offer plans to everyone, price predicated on certain criteria Compete across state lines (would incentivize choosing where to incorporate & flocking to certain states Consumer directed health care—expose consumers to costs to internalize/understand relevant costs Instead of being an exclusion—could have a credit up to a certain cap everyone would have access to a certain tax benefit and if a taxpayer wanted more it would be available Accountable care Doctors compensated for the number of patients for which they’re responsible—not predicated on tests, etc. How should we implement these? Exclusion wouldn’t solve the problem of people not knowing their health care costs Deduction would regressively offer more value to people with higher income Credit—would work best if it were flat and refundable for cost of insurance (not health care) health care providers would still be providing to a varied pool—people would be permitted to choose whatever health care plan they wanted and if they wanted more than their credit they would just pay extra Senate plan: Creates exchanges (pools) with certain minimum policies Available to both employers and individuals Keeps employer tax incentives Creates credits Regulates what insurance companies can use to price (pre-existing conditions only 3x, age, smoker, family size) Penalized for non-compliance—imposed through the tax system (?) Effects: Progressive Refundable credits subsidizing co-pays Tries to correct for co-pay’s effects on take up—would cut back on care available to low income taxpayers Directory: sites -> default -> files -> upload documents upload documents -> Torts Outline Daniel Ricks upload documents -> Torts outline Functions of Tort Law upload documents -> Constitutional Law (Yoshino, Fall 2009) Table of Contents upload documents -> Arrest: (1) pc? (2) Warrant required? upload documents -> Civil procedure outline upload documents -> Criminal Procedure: Police Investigation upload documents -> Regulation of Agricultural gmos in China upload documents -> Rodriguez Con Law Outline Judicial Review and Constitutional Interpretation upload documents -> Standing Justiciability (§ 501 Legal/beneficial owner of exclusive right? “Arising under” jx?) 46 Statute of Limitations Run? 46 Is Π an Author? 14 Is this a Work of Joint Authorship? 14 Is it a Work for Hire? upload documents -> Fed Courts Outline: 26 Pages Download 0.73 Mb. Share with your friends:
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