Health Care Law Blog

Health Insurance Providers Beware – April 15 is Quickly Approaching

The Patient Protection and Affordable Care Act requires that certain health insurance providers pay an annual fee based on the net premiums they wrote during the preceding calendar year. The providers required to pay this fee include health insurance issuers; health maintenance organizations; certain insurance companies; insurers providing Medicare Advantage, Medicare Part D, or Medicaid coverage; and multiple employer welfare arrangements.

In order to calculate the fees, the Internal Revenue Service (“IRS”) must obtain information related to the amount of net premiums written by each health insurance provider. This is accomplished through IRS Form 8963 (Report of Health Insurance Provider Information). Health insurance providers are required to submit Form 8963 to the IRS by April 15 of each year. Read More ›

Categories: Compliance, Health Care Reform, Insurance, Tax

Posted by: Mindi M. Johnson

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Employer Mandate Delayed…Again

On Feb. 12, 2014, the U.S. Department of Treasury and the Internal Revenue Service published final rules (the “Final Rules”) related to the Employer Shared Responsibility provisions of the Patient Protection and Affordable Care Act (“PPACA”). The Employer Shared Responsibility provisions, referred to as the “Employer Mandate,” generally require certain employers to offer minimum essential health care coverage to their full-time employees or face penalties. The Employer Mandate was originally scheduled to become effective on Jan. 1, 2014 but was delayed until Jan. 1, 2015.

The Final Rules include a second delay of the Employer Mandate. They provide that employers who employ 50 – 99 full time equivalent employees will not be required to comply with the Employer Mandate until Jan. 1, 2016. Additionally, those employers who employ 100 or more full time equivalent employees must offer minimum essential coverage to only 70 percent of those full time employees by Jan. 1, 2015 (as opposed to the 95 percent coverage requirement under the previous regulations). Those employers employing 100 or more full time employees will be required to offer coverage to 95 percent of all full time employees by Jan. 1, 2016. The chart below summarizes the basic details concerning this delay. Read More ›

Categories: Health Care Reform, Insurance, Tax

Posted by: Mindi M. Johnson

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ERISA Challenge to Michigan’s Health Insurance Claims Tax is Rejected

On August 31, 2012, a federal district court ruled that the Michigan Health Insurance Claims Assessment Act is not preempted by the federal Employee Retirement Income Security Act.  The act imposes a 1% tax on paid health insurance claims for services rendered in Michigan to residents of Michigan.  The tax is assessed against commercial insurers, HMOs, nonprofit health and dental corporations, Medicaid managed care organizations, specialty prepaid health plans, third-party administrators, and group health plan sponsors.  The act, which took effect on January 1, 2012 and expires on December 31, 2013, authorizes the state to collect up to $400 million in revenues each year, which are used to fund the Michigan state share of the Medicaid program.  When combined with the federal multiplier, the tax will generate $2.4 billion in funding for Michigan’s Medicaid program. Read More ›

Categories: Employee Benefits, Insurance, Tax

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IRS Focusing on Employment Tax Compliance

Recently, health care organizations have been inquiring about employment tax issues, and more specifically, the proper tax classification of their workers.  Questions include whether to classify medical directors, such as hospice medical directors, as employees versus independent contractors. Read More ›

Categories: Employment, Tax

Posted by: Jennifer B. Van Regenmorter

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2011 IRS Guidance on Accountable Care Organizations

Many questions surround the creation and implementation of accountable care organizations ("ACOs").  Included in these questions were concerns about the tax implications of an exempt non-profit organization in joining an ACO.  In 2011, the Internal Revenue Service ("IRS") was active in providing guidance on that issue.  Specifically, the IRS addressed issues related to inurement or impermissible private benefit that arise from a tax-exempt organization's participation with an ACO.  It also considered the unrelated business income tax implications for the receipt of shared savings by an exempt organization. Read More ›

Categories: Accountable Care Organizations, Health Care Reform, Hospitals, Physicians, Tax

Posted by: Mindi M. Johnson

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What is the Effect of Recent, Landmark First Amendment Cases on the Ability of a Tax Exempt Organization to Engage in Political Activities?

In 2010, the United States Supreme Court in Citizens United v. Federal Election Commission ("Citizens United") reinforced the free speech rights of corporations and labor unions to participate in the political process through independent communications expressly advocating the election or defeat of a clearly identified candidate.  Also in 2010, the United States District Court for the Western District of Michigan held in Michigan Chamber of Commerce v. Land¹ ("Michigan Chamber of Commerce") that corporations could pool their resources with other corporations in order to exercise their rights to make independent expenditures expressly advocating the election or defeat of a candidate. Read More ›

Categories: Hospitals, Physicians, Tax

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Health Care Claims Tax Passes

On August 24, the Michigan legislature passed two bills which are expected to be signed by Governor Snyder, which will be known as the "Health Insurance Claims Assessment Act".  The Health Insurance Claims Assessment Act will assess a 1% health care claims tax on paid health insurance claims in Michigan.  This tax will be paid by health insurers and replaces an existing 6% assessment on Medicaid health claims.  The tax will be assessed for a period of two years, beginning January 1, 2012 and ending January 1, 2014. Read More ›

Categories: Medicare/Medicaid, Tax

Posted by: Jennifer B. Van Regenmorter

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Lowering Single Business Tax Liability

Pamela Dusman recently had a significant victory in the Michigan Court of Appeals on behalf of a hospital client.  The hospital client, in calculating its single business tax liability, specifically its "unrelated taxable income," on its Michigan Single Business Tax Return claimed a capital acquisition deduction and an investment tax credit for its capital assets regardless of whether the assets were used for tax-exempt or non-exempt activities.  The Michigan Tax Tribunal upheld the hospital's position, holding that the hospital did not need to allocate its assets between exempt and non-exempt uses when claiming the capital acquisition deduction or the investment tax credit.  This reading of the Single Business Tax Act was upheld by the Michigan Court of Appeals on February 15, 2011.  Although the Single Business Tax Act was repealed by the legislature for tax years that begin after December 31, 2007, an entity's Single Business Tax Return may be amended within four years after the due date of the original return.  This decision can have a significant impact on lowering single business tax liability on unrelated business income for tax-exempt providers. 

Categories: Hospitals, Tax

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