THE TAX ATTIC with Jerry Coon

Jerry Coon

“We are masters of our own deception.” Bryan Boersma, Rockford Reformed Church’s Associate Pastor, started his sermon last Sunday by attributing this quote to one of his favorite authors, Frederick Buechner. Bryan actually said he thought this was a quote from Mr. Buechner, but couldn’t put his finger on it. I have read some of Mr. Buechner’s writings and while I couldn’t find that exact quote either, it certainly seems Frederick Buechner’ish to me.

Bryan’s sermon was on the topic of Jesus’ parable of the Good Samaritan. As one of the factors in gaining eternal life, we are told to love our neighbor. According to Bryan, how we define loving our neighbor is exactly where we are the masters of deceiving ourselves. In fact, we can be downright selective in defining who we want to love and how we want to love that person.

In the parable, a priest and a Levite chose to not define the person lying on the side of the road as their neighbor and since he wasn’t their neighbor, they didn’t need to love or, in this case, help him. The Good Samaritan came to the opposite conclusion, helped the beaten person, and received praise from Jesus.

Bryan’s sermon was certainly thought provoking. In how many situations have I been pretty good at deceiving myself? How many times should I have helped someone and didn’t? Of course, I’m going to say to my recollection, it has never happened. I don’t believe that I’m a master at deceiving myself, but perhaps I am so good at thinking I’m not deceiving myself that I really am a master at it. Let that sink in for a moment. Thank you, Bryan, for making me consider how I define my neighbor and, in turn, how I should love that neighbor.

The Patient Protection and Affordable Care Act (ACA) is an attempt by the federal government to require all people to participate in the health care system. The logic is that everyone is participating in the health care system to some extent now, but there are approximately 30 to 50 million people who don’t pay to participate because they don’t have insurance. The costs associated with the 30 to 50 million people is borne by the system itself and therefore spread out among those who do have insurance.

The ACA requires each state to set up a Health Insurance Exchange by January 1, 2014, where everyone will be able to buy a health insurance policy. There will be at least four levels of policies offered:

•            Level 1: Bronze covers 60% of the costs for covered benefits with the insured paying the remaining 40%.

•            Level 2: Silver covers 70% of the costs with 30% out of pocket.

•            Level 3: Gold covers 80% costs with 20% out of pocket.

•            Level 4: Platinum covers 90% costs with 10% out of pocket.

The cost of each level will be a blend of current plans that are available in that state. It appears, however, that the premium cost associated with each level will be higher than we pay now, due to the required inclusion of benefits that are not currently included such as dental services.

The out-of-pocket costs are limited to the same maximums that apply to Health Savings accounts: $6,250 in 2013 for singles and $12,500 for families. In 2014, after being adjusted for inflation, the amounts will be slightly higher.

The advantage of having an exchange is creating a market where taxpayers can purchase individual or family insurance. Since unemployment continually is running at least 8% and many of the 92% who are employed do not receive an employer-paid, health insurance benefit, an exchange is a type of group option for non-covered taxpayers to go.

I don’t like the fact that the federal government is going to be calling the shots on the exchange. The shots tend to be political and not necessarily based in logic when Washington or even Lansing takes over. However, the states all have a chance to set up the exchanges and, if done right, taxpayers who are shut out of getting insurance in today’s market will be able to buy insurance.

Next week, I will go over the premium tax credits that will be available starting in 2014 that will lower the cost of the exchange premium. This is Jerry Coon signing off.

Jerry Coon is an Enrolled Agent. He owns Action Tax Service on Northland Drive in Rockford. Contact Jerry through his website: www.ac

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