<p>I’m just pointing out how ridiculous your assertion is. But no, I don’t have a clue what many corporate execs actually do to “earn” their 7 figure salaries.</p>
<p>"You don’t think the IRS will be looking at the tax returns of people who qualify for subsidies to see if income has been improperly manipulated to qualify for subsidies? "</p>
<p>Unless you can point to a statute that says IRS has this new requirement, no.</p>
<p>They still have a responsibility to go after people who underreport, not over report income.</p>
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<p>No, I don’t. I think you can give your employee a nice Christmas bonus and the IRS won’t bat an eye.</p>
<p>
2014 will be the “first time” anyone qualifies for a health care subsidy. </p>
<p>But I am sure that in the past many employers hired on new employees to qualify for job credits, and didn’t keep those employees on past the time when they had to. The tax code is full of all sorts of credits but the IRS doesn’t have the time nor the authority to explore what people are thinking when they take actions to qualify for those credits.</p>
<p>So I am comparing 3 plans with 3 very different monthly premiums, but everything about the plans is identical!! same deductibles, co-pays, co-insurance. There must be a difference to explain the different prices. Guess I will have to call bcbsnc to find out. </p>
<p>Blue Select Silver 3500
Blue Value Silver 3500
Blue Advantage Silver 3500</p>
<p>You think maybe it’s the network? Are all of them PPOs?</p>
<p>NJ. If you add it all up for each plan, you will see that they all extract the same amount from you one way or the other. I mentioned this about nc really early on in this thread. It’s kind of fascinating.</p>
<p>Blue Value is a limited network, Blue Advantage is the “full” network, and Blue Select has tiered pricing. </p>
<p><a href=“http://www.bcbsnc.com/assets/plans/public//pdfs/U9144a_Under_65_Combo_Brochure_r001[/url][1]_Revised-FINAL-9-6-13.pdf”>http://www.bcbsnc.com/assets/plans/public//pdfs/U9144a_Under_65_Combo_Brochure_r001[1]_Revised-FINAL-9-6-13.pdf</a></p>
<p>CF’s link doesn’t work - here’s an alternate link to a web page you can browse:
<a href=“404”>https://www.bcbsnc.com/content/plans/individuals/2014/plans.htm</a></p>
<p>There’s a “compare” tool that you can use at that page, but the main difference seems to be the networks and scope of prescription drug benefits.</p>
<p>Sorry about that. I can’t figure out how to put that link into a post. I think CC doesn’t like the brackets. But if you can paste the text into your browser, it links to a pdf that explains Blue Value, Blue Advantage and Blue Select.</p>
<p>Naw, cutting and pasting the whole link doesn’t work either – probably because of the ellipsis that CC inserted after plans/p</p>
<p>I did figure out the whole URL to the PDF, but I can’t get CC to display it. </p>
<p>Here is the complete part that comes after the “http: // <a href=“http://www.”>www.</a>” (no matter what I do, if I include that, CC works its magic. It does choke on the brackets for technical reasons that would take too long to explain.</p>
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<p>By the way, I found that pdf in the simplest way. I went to healthcare.gov, I went to the shop before you buy section, and I got a quote for a person in Durham, North Carolina (I picked Durham because it was the only city I could think of in North Carolina). I got the plans NJRes cited, and a lot of others. I clicked on the Details for the Blue Select plan, and there was the brochure, in pdf form.</p>
<p>Okay, I am getting tired of this topic but I am going to try one more time. What we are really talking about here is paying a kid or some relative for work never performed in order to qualify for a substantial subsidy. The IRS might be interested in these types of transactions for those people who are receiving subsidies, particularly if it deviates from their past tax returns. This is different from retirement contributions or other legitimate expenses. </p>
<p>For instance, the IRS is very interested in what an owner of a Sub S Corp pays himself. If they think the salary is understated or doesn’t conform to industry standards, there is a good chance you are going to get audited. Although this is different, the same principle applies. If you pay a relative for work never performed or where the income is not commensurate with the work performed and you receive a benefit as a result, such as a lower tax liability or a substantial subsidy, the IRS could contest the transaction. </p>
<p>I don’t know if they will examine returns for these types of transactions but they might if there is widespread fraud in claiming these subsidies. Many people are predicting extensive fraud as a result of the ACA law.</p>
<p>I was talking about paying the adult child for work he did perform, actually. I don’t believe this is fraud. I don’t think the IRS would go after it, because I don’t think it would be illegal. And GP, if you think it is illegal, I’d like to see the statute you think it violates.</p>
<p>'I don’t have a clue what many corporate execs actually do to “earn” their 7 figure salaries."</p>
<p>Calmom, from your perspective this is probably not altogether different from me paying lower premiums because unhealthy and/or poor people were excluded from the insurance pool. I imagine you would not have a problem having the govt regulating the amount of compensation people on Wall Street receive. If you think it is okay for the govt to FORCE me to pay higher premiums in the private marketplace for sick people, why not use the govt to force Wall Street fat cats to take less salary</p>
<p>“I was talking about paying the adult child for work he did perform”</p>
<p>Yeah, but in all likelihood we are probably talking about paying the child for work he didn’t perform.</p>
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<p>I said absolutely no such thing.</p>
<p>I assume you’re referring to this: </p>
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</p>
<p>If so, read it again.</p>
<p>*As a business owner, you should not be providing misinformation here. * No one should be providing misinfo. Who here is a tax accountant?</p>
<p>GP, you let your self get backed into the wrong corner. They mutated your original point. I’ll skip to this: if parents can afford to “pay” their kid, can afford the loss to their own funds, can pay the requisite taxes on him (which depend; you can look up what irs says-)</p>
<p>Then why can’t the parents just buy him a policy? In my state about $250. Task accomplished.</p>
<p>NJRes, the differences go past a surface appearance of “same deductibles, co-pays, co-insurance.” Calmom’s link hints at it. You’d need to see what co-pays and co-insurance apply and when. There are usually trade-offs. Eg, my “Select” Silver offering through the exchange has cheaper inpatient but higher doc fees, co-insurance, higher Rx, than its sister plans. </p>
<p>Also, the plans follow BCBS in terms of categories of coverage, but the exchange formulas can be different. For the Select Silver plan I just mentioned, BCBS has a % co-insurance for inpatient. The exchange overrides that and sets it at $0 co-pay. In other categories, this plan has a 20% co-insurance while straight BCBS has it at 10%. So BCBS helps you with core understanding and you still have to refer back to the exchange specifics.</p>
<p>The question was whether it was legal for the parents to employ the adult child, not whether it is profitable. I can think of multiple long-term benefits that would favor such an arrangement, particularly for parents who are concerned about their offspring’s future. The point is that they have the legal right to employ whomever they want, and the IRS doesn’t care whether or an employed person is related to his employer or what his job duties are (as long as the job itself isn’t illegal). </p>
<p>We have to assume that the child is age 26 or over (so can’t go on the parent’s policy) and cannot be claimed as a dependent, which suggests either that someone else is contributing to his support or that he does have some source of modest income. </p>
<p>I think we can also assume that the parents are probably in the position of contributing a substantial amount of money to the adult child’s support, either by paying for his expenses to live elsewhere or by providing him room or board. </p>
<p>Aside from the health care subsidy, other benefits of employment include:</p>
<ul>
<li><p>child will be paying social security and medicare taxes, which will be a step toward qualifying for these benefits when he is older</p></li>
<li><p>if the money is not needed for living expenses (e.g., the child lives rent-free with the parents or another relative) - then money could be put into a Roth IRA - a path that will also benefit the child down the line. </p></li>
</ul>
<p>I think that it’s really outside the scope of this thread to explore those benefits – this is the sort of thing that the family could discuss with a tax accountant. If it was simply a matter of the parents wanting to protect their own pocketbook, then it’s true - it’s cheaper to just buy the kid a policy off the exchange. But if their end goal is to help lay a foundation for a more secure future for the kid, then the other concerns come into play.</p>
<p>It would be better still if they help him find a job working for someone else, but that might not be realistic at this point.</p>