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White House Publishes Final Regulations For Obamacare’s Individual Mandate — Seven Things You Need To Know   Leave a comment

From Forbes 8/2013

On Tuesday, the Obama administration released the final regulations for Obamacare’s notorious individual mandate—the provision in the health care law that requires most Americans to purchase health insurance, or pay a fine. Tuesday’s entry in the Federal Register, spanning 75 pages, contains all of the fine print related to the individual mandate: who it applies to, who is exempted, and what kinds of insurance satisfy the government’s rules. Here are seven things you need to know about the mandate, what the law calls your “Shared Responsibility Payment for Not Maintaining Minimum Essential Coverage.”

1. You pay a fine if your spouse and kids are uninsured

If you claim dependents on your tax return, you’re responsible for paying the mandate fines if your dependents don’t have health insurance. “A taxpayer is liable for the shared responsibility payment for an individual without minimum essential coverage if the individual is the taxpayer’s dependent,” write the authors of the new regulation, Heather Maloy, Acting Deputy Commissioner for Services and Enrollment at the Treasury Department; and Mark Mazur, Assistant Secretary of the Treasury for Tax Policy.

This provision takes on special importance because of its interaction with Obamacare’s employer mandate. Under the health law, employers with more than 50 full-time-equivalent workers are required to offer health coverage to their employees and employees’ dependents under the age of 26. Employers are not required to offer coverage to employees’ spouses. Hence, a worker who gets coverage through his job will be forced, under the individual mandate, to purchase coverage on his own for his spouse, if he or she doesn’t have other sources of coverage. A worker who doesn’t get coverage through his job will need to purchase coverage not only for himself, but also his dependents.

2. Pretty much any employer-sponsored plan meets the mandate’s requirements

In order to meet the mandate’s requirement, you have to have “minimum essential coverage.” That is a key term in the context of Obamacare. Medicare and Medicaid count as minimum essential coverage, as do plans purchased in the Obamacare exchanges. As for employer-sponsored coverage, pretty much any plan offered by an employer counts as meeting Obamacare’s requirements.

Paragraph 2 of Section 5000(A)(f) of the Internal Revenue Code defines employer-sponsored minimum essential coverage as “a group health plan or group health insurance coverage offered by an employer to the employee which is [either a government-sponsored plan] or “any other plan or coverage offered in the small or large group market within a State.”

In other words, any health insurance plan that is legally sold within a state’s boundaries counts as an “eligible employer-sponsored plan.” In many states, insurers market inexpensive plans that cover a limited range of services. According to Obamacare, employers can offer these inexpensive plans to their workers and thereby avoid the employer mandate’s strong penalty. Indeed, as I detailed in May, many employers will have a strong incentive to offer these “skinny” plans, and some are already starting to do so.

3. The mandate fine is small, and will have even less impact over time

In 2014, the fine for not carrying insurance is the higher of $95 per person or 1.0 percent of taxable income. In 2015, the fine is the higher of $325 per person, or 2.0 percent of taxable income. In 2016, it’s $695 per person or 2.5 percent of taxable income. You’re liable for up to 2 additional dependents, fine-wise.

A number of people have remarked upon the obvious fact that a several-hundred-dollar fine is nothing, compared to spending several thousand dollars on overly costly health insurance. But what a lot of people don’t realize is that, after 2016, the size of the fine is adjusted annually for cost-of-living increases. But historically, the cost of insurance has gone up every year at rates far exceeding normal inflation.

If that trend continues, the gap between the mandate fine and the cost of health insurance will continue to widen, incentivizing more people to go without coverage.

4. The IRS can’t go after you if you don’t pay the fine

Section 1501(g)(2) of the Affordable Care Act specifies that the IRS cannot subject taxpayers to “any criminal prosecution or penalty” for refusing to pay the mandate fine. Also, in contrast to normal tax levies, the IRS cannot “file notice of lien with respect to any property of a taxpayer by reason of any failure to pay the penalty imposed by this section.”

Basically, the only thing the IRS can do to make you pay the mandate fine is to take it out of your withholding, or withhold it from your tax refund, if you’re due one. So if you don’t participate in the withholding process, the IRS has no way to collect the mandate fine.

5. Many older individuals will be exempt from the mandate

If you need to buy insurance on your own, you’re exempt from the individual mandate if the cost of your coverage is more than 8 percent of your household income. (The percentage is adjusted, over time, using a somewhat complex formula.) This means many older people—who pay higher premiums than younger people—will be exempt from the mandate altogether.

Paul Houchens, an analyst at Milliman, puts it this way: if you’re 55 years old, and you’re paying $7,800 a year for health insurance, you’ll be exempt from the individual mandate if your income is between 400 percent of the federal poverty level—about $46,000—and $97,500. (If your income is below $46,000, you qualify for at least a partial subsidy of your insurance costs, which, based on the way the law is written, makes the individual mandate apply to you.)

On the other hand, if you’re a 35-year-old, and you’re paying $3,600 a year for your health coverage, the mandate applies to you in nearly all cases, because $3,600 divided by 8 percent is $45,000, which is lower than 400 percent of the federal poverty level.

6. If you don’t file a tax return, you’re exempt

You’re also exempt if your income is below the poverty line, or if you don’t file an IRS tax return. Indeed, if you add up all of these exemptions, MIT economist and Obamacare architect Jonathan Gruber estimates that 40 percent of people who are uninsured are exempt from the individual mandate.

7. ‘Members of recognized religious sects’ and American Indians are also exempt

If you’re a member of a “federally-recognized Indian tribe,” congratulations! You’re also exempt from the individual mandate. This is in part because the Indian Health Service offers government-run health care to members of such tribes. Members of a “recognized religious sect or division,” as specified in Section 1402(g)(1) of the Internal Revenue Code, are also exempt. So, you might be asking yourself: which “religious sects” are exempt?

The Internal Revenue Code exempts an individual from certain taxes if he is “a member of a recognized religious sect or division thereof and is an adherent of established tenets or teachings of such sect or division by reason of which he is conscientiously opposed to acceptance of the benefits of any private or public insurance which makes payments in the event of death, disability, old-age, or retirement or makes payments toward the cost of, or provides services for, medical care,” including Social Security, Medicare, and Medicaid.

Your “sect” has to have been in continuous existence since December 31, 1950, and the Commissioner of Social Security must agree that your sect “has the established tenets or teachings” consistent with opposition to medical benefits. While there are some on the Internet who believe that this religious exemption applies to Islam, it doesn’t appear that way to me, as Muslims are not exempt from Social Security. Instead, the exemption is meant for groups like the Amish.

So if you really hate the individual mandate, you don’t have to burn your Obamacare card—just join the Amish or an Indian tribe!

The One Question That Ruins An Interview   Leave a comment

The One Question That Ruins An Interview

Most HR representatives and headhunters agree on one thing: that few candidates arrive at the interview prepared to answer the one question that is almost always asked, “What is your greatest weakness?”

Although the question is seldom phrased like that anymore, it doesn’t matter how they word it because the response has to be the same. The interviewer wants you to tell them your weakness, where you need to improve, where you’re not as strong in technical skills or management experience, or something.

Candidates get flustered with this question more than any other, and for no good reason.

I’ll Let You In On A Secret…

Most of the time, the person asking that question doesn’t even want to know the answer. They ask the question because they want to see how you answer it.

After listening to responses from thousands of candidates, and discussing the issue with dozens of clients, I’m convinced there is only one way to answer the question, and that is by being…

Honest

Honesty is a much abused virtue. Really, the only time you see or hear of someone being honest is when they’re apologizing for already being caught. A politician with his pants down or his hands in the till. A comment that “slipped” out and offended any number of ethnic groups or religions. Or, a more general act of civil disobedience. The one thing in common is that the “honesty” part only surfaces after the guilty party is exposed. People are forgiving souls though, and if the apology is well-written and presented sincerely, all ends well.

This Is Not So In An Interview

You don’t get that second chance in an interview. You don’t get to rally the troops, have someone write a speech, and then proffer an apology. In an interview, you’re stuck with what slipped out of your mouth, so you better be prepared.

This is not difficult. You should know what your weakness is. People have probably been telling you all of your life—parents, spouse, co-workers—and by now it should have sunk in. If you don’t know it, think hard about the term “self-awareness.”

In any case, it doesn’t matter because that weakness you’re about to blurt out is nothing the interviewers haven’t heard before. In fact, if you didn’t know this, here’s another secret for you—everyone has a weakness. Even Superman can be hurt by kryptonite.

The reason you’re being interviewed is because the company thinks you might be able to help them solve their problems. They brought you in because of your strengths and accomplishments—accomplishments that you achieved even with your weaknesses. If you show them you can solve their problems, you’ll stand a good chance of getting the offer. Being honest with this response will go a long way toward getting the offer because they’ll know that, if you can be honest about your weaknesses, they can probably trust your other responses.

Don’t Try To Be Clever

The worst possible response would be to try and pass off a weakness as a strength. I’ve seen people recommend doing this, and it’s garbage advice. If the best answer you can come up with is that you are a perfectionist or that you work too hard, you have far bigger problems than you realize.

So, how do I answer the question? I’m not going to tell you how to answer the question. No one but you can do that. But I’ll show you an example of a normal response that’s a good one:

Let’s assume you’re a design engineer.

“I have a tendency to rush things. In the past that resulted in a few quality problems with the finished product. The second boss I had worked with me on that, and I’ve had to resort to desperate measures to slow myself down. If you walk into my office, you’ll see sticky notes all over my computer and desk, with notes that read, ‘SLOW DOWN’ or ‘Double check everything!’

“I also set alarms on my phone that pop up twice a day reminding me of the same things. When I see these reminders, it hits home. The good thing is, the process works. The last two products we put out have been finished on time, on budget, and, so far, with no field problems or quality issues. It’s actually made me a much better engineer, but, I still need those reminders.”

This kind of weakness people can relate to because it really is a weakness. The difference is you’ve shown that you learned how to deal with it.

Preparation

You should practice your response so you’re comfortable discussing it, but don’t make it sound like a rehearsed speech. Also, be prepared for the interviewer to probe deeper. Some interviewers like to dig a little to see if there’s any fluctuation in your answer or if you try to back off when pressed.

Bottom Line

Always be honest, even if you think it might hurt your chance for an offer, although it probably won’t. To summarize, here’s what to do when you’re asked the question.

  • State your weakness.
  • Let the interviewer know you’re aware of it.
  • Show them you’ve figured out how to deal with it.
  • Show them that solution worked.