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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10108
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Im considering moving to Medicare and off employer insurance

Customer Question

Im considering moving to Medicare and off employer insurance (Humana). Im wondering what my tax implications will be?
JA: The accountant will know how to help. Please tell me more, so we can help you best.
Customer: CORRECTION: I want to move to Medishare
JA: Is there anything else the accountant should be aware of?
Customer: Ill lose my $7k employer allowance to pay for my medical insurance costs
Submitted: 17 days ago.
Category: Tax
Expert:  Lane replied 17 days ago.

Hi ... I've already answered you ... but they've been having some site issues and I don't see anthying here ... So I'll post again

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Expert:  Lane replied 17 days ago.

If your company was doing the reimbursement plan through what's called a section 105 plan (so that the allowance wasn't taxable to you) nothing changes at all.

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Taking it away, leaves your taxable income exactly the same.

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Now... It ma have the effect of changing yoiur cash flow (in the case where you were getting more in the allowance than your insurance actually cost you, for exampe) but there;s no cha nge in your TAXABLE income.

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And although Medishare isn't insurance it's ACA compliant, so you'll have no fees for not having coverage, if that's the question.

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Please let me know if you have qurther questions, and whether I've understood your question correctly

Customer: replied 17 days ago.
Lane, thx. Is there no way for my employer to contribute to my health care costs within a Medishare program? If they just give me the $7k allowance for healthcare coverage (part of my contracted allowance) then they'll be taxed for that income and so will I. is there not another way for us to receive tax deductions for medical sharing plans? No way to set up an HSA, HRA, etc?
Expert:  Lane replied 17 days ago.

So sorry, at this point in time (under ACA) the HRA and HSA option won't work.... HOWEVER part of the House republican bill (and Trumps plans) HSAand HRA will again be liberalized ... and this COULD come quickly

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