Just saw "SICKO" - Posted by Terry Vaughan

import · November 18, 2007, 4:06am

Re: Two C-sections and done counting - Posted by Frank Chin

Posted by Frank Chin on November 18, 2007 at 05:06:05:

Penny:

I have a rental business going back years, and I haven’t gotten anything in LLC’s there. I have an active business that is in an LLC.

What I did was I set up a “C Corp” management company that collects management fees from myself (deducted off the schedule E) as well as against the LLC (deducred against the 1065 returns). And I only collect enough management fees to pay for benefits I need, and no more. With this, I thus avoid the issue of “double taxation”, as I control what “comes into” the C Corp.

I avoid “S Corps” as there’s limits on passive income as well as the need to pay FICA on income.

Frank Chin

import · November 17, 2007, 7:29am

Re: Two C-sections and done counting - Posted by Penny

Posted by Penny on November 17, 2007 at 08:29:32:

In my previous post, I want to clarify on the S-corp medical deductions. The company can deduct it. It’s with respect to whether the premiums paid by the company are a taxable benefit to the HCEs/shareholders and I think it currently is.

import · November 18, 2007, 5:27pm

i don’t think - Posted by lukeNC

Posted by lukeNC on November 18, 2007 at 18:27:11:

mcdonalds, kfc, burger king and all those huge corps would like that talk.

import · November 18, 2007, 1:55am

Re: Just saw “SICKO” - Posted by RichV(FL)

Posted by RichV(FL) on November 18, 2007 at 02:55:04:

Wayne,

Boy does the government create more problems. All you have to do is take a look at Social security, Medicare and Medicaid.

I dont think anyone can come up with one government “program” that works REALLY well.

RichV(FL)

import · November 17, 2007, 5:55am

Blue Cross Blue Shield - Posted by Jim

Posted by Jim on November 17, 2007 at 06:55:45:

We got BCBS with 2 employees (both officers of the company) with no problem.

Rates are higher with a small company, but the insurance is great.

import · November 17, 2007, 4:11am

Sure would like to know why? - Posted by Wayne-NC

Posted by Wayne-NC on November 17, 2007 at 05:11:50:

[I also distrust conservatives–but for different reasons]. This interests me. I would really like to know your thoughts. I may question them but that is how I(we) learn. I agree with all else in this post! From the many posters I do know and converse with outside of this forum, we tend to be the choir on these liberal vs conservative issues of our time. And you know which side.

import · November 19, 2007, 2:08pm

Maybe not quite … - Posted by Frank Chin

Posted by Frank Chin on November 19, 2007 at 15:08:48:

Ken:

I had a “bad experience” with a hospital once, when they placed me for collections when my health insurer failed to pay, six months after services rendered. I learned more about “billing practices” than I care to know.

I was in the emergency room for approximately 6 hours, and the bill came to about $3,500, the “biiled amount”, between the hospital and the doctor.

BUT, as I found out, insurance plans has a “negotiated rate” with each hospital, and had they paid approximately $1,700, around half, the bill would have been paid in full. The remainder is the “insurer’s discount”.

It so happened that when I checked in, I signed something to the effect that if the insurer did not pay, they could come after me. I found out later this was not exactly legal. But when they came after me, it’s on the “billed rate”, not the “insurer’s negotiated rate”.

I proceeded to complain to the NY State Insurance Department, and the local Newpaper, “Newsday”, and the insurer approved the payment the same week, after not paying for 6 months, when the news reporter called the insurance company president to ask if they were indeeed not paying their bills.

It was funny, the company president admitted they were month behind, being investigated, but Mr. Chin’s bill has just been approved.

About a month later, the insurer wrote to the NY State Insurance Department, responding to my complaint, stating that they paid the bill, about $3,500, in full, with checks totalling $1,700, plus interest mandated by the state, paying at what the called the “insuer’s negotiated rate”. The State sent me a copy of the insurer’s reply, including attachments, check numbers paid, amount paid etc.

What happened next was the collection agency then came after me for the difference. However, I was smart enough when I paid the $50.00 co-pay directly to the hospital, I wrote down “payment in full”. In addition, I pointed out to them the “insurer negotiated rate” is already paid, and to collect the difference is fraud, and I will notify the Attorney General, as well the news reporter who wrote original the story about me, and about the non paying insurer, telling them that a hospital trying to collect double would be an even more interesting story. They backed off.

Bottomline.

"Billed rates are for suckers that don’t ask. If you paid half, you’re paying about what the insurance company is paying.

Frank Chin

import · November 19, 2007, 2:17pm

Re: Response from a Doctor - Posted by DaveD (WI)

Posted by DaveD (WI) on November 19, 2007 at 15:17:01:

The answer, Frank, isn’t to trade one beauracracy for another. To get the “best deal” in anything else in life, you don’t go through a dozen agents. You go directly to the source. You also come to the conclusion that maybe you can’t have an MRI for your next stubbed toe, when faced with the real cost of providing one. I’m willing to believe folks will do the right thing and act in their best interests if they know what stuff costs and what their alternatives are. As it stands now, nobody can penetrate the fog we call modern medicine.

The solution really simple, but difficult given the entrenched interests of insurance, government, trial lawyers and drug companies… all who are shielded from the effiencies of the market. Still, my bet is on the profit-seeking companies being able to adjust instead of giving the power to make decisions to the government.

You want “cheap” health care? My guess is you won’t like the ultimate price. Hope you don’t smoke. Or drink. Or are kinda heavy. Or not green enough. Or are politically incorrect. Or have the “wrong” political convictions, period. Afraid of big brother watching? You ain’t seen nothing yet.

import · November 19, 2007, 5:21am

Re: profit driven healthcare - Posted by DaveD (WI)

Posted by DaveD (WI) on November 19, 2007 at 06:21:31:

Well, I haven’t seen much in the way of world beating drugs come out the non-profit academia lately… and they receive billions of taxpayer loot. It’s about performance, Luke, and your way doesn’t get it done. And then you have a prez candidate who says she want’s to TAKE drug company profits and thinks she can do better with them. Along with the oil company profits she wants to TAKE as well.

On the morality scale, that places her somewhere between a thief and a dictator. Neither which is good for medicine. Or your ability to drive your own car. And thank goodness you don’t have RLS. You just embarrassed yourself.

import · November 18, 2007, 9:32pm

Re: profit driven healthcare - Posted by Bob Smith

Posted by Bob Smith on November 18, 2007 at 22:32:08:

Yes, a pill for Restless Legs Syndrome. I take it you don’t have it,
because if you did you’d be screaming for somebody to develop said
pill. RLS sounds innocuous, but it’s awful. I have it, and it wreaks
havoc on my ability to get a good night’s sleep. Profit makes people
who don’t know or care about me develop products that help me for
no other reason than to get rich. Thank God for profit.

import · November 18, 2007, 8:55am

Re: Just saw “SICKO” - Posted by Cletus

Posted by Cletus on November 18, 2007 at 09:55:52:

Yea, I tried those once. But being a typical male I never read the directions and assumed they were of the frontal suppository variety. Besides the obvious chocking hazard to my wife, the pain was unbearable. So I donâ??t do that anymoreâ?¦

Anyway, on another note, I am recovering from a near fatal bout of Restless Leg Syndrome (RLS). It seems the original acronym for this hideous disease was called GOES. It stood for the Ghost of Elvis Syndrome. But the pharmaceutical companies couldnâ??t make any money using that moniker because most people thought they could be cured by just eating some cheese when they came down with a case of the GOES.

Cletus

import · November 17, 2007, 9:09am

Re: Dental is the worst scam… - Posted by Wayne-NC

Posted by Wayne-NC on November 17, 2007 at 10:09:37:

“I’ve got a friend of mine who’s a dentist and LOVES cash-paying clients. Offers a discount too.”

Maybe he just charges a premium for those without cash. Classic example using the time value of money or the “cash is king” mentality. I wonder what the insurance companies would say if they knew about that. Could they justify fraud? Hmmm.
I guess it all boils down to what you call it.

import · November 18, 2007, 8:17am

Re: Two C-sections and done counting - Posted by Bob Smith

Posted by Bob Smith on November 18, 2007 at 09:17:35:

S-Corporations have no limits on passive income if they have no retained
earnings from previous years as a C-corporation. The need to pay a
salary is no big deal if you’re running an active business through one.

import · November 18, 2007, 7:57am

Great approach - Posted by Penny

Posted by Penny on November 18, 2007 at 08:57:41:

Thanks, Frank. I really enjoy reading your posts - you have great insights.

Your solution echoes my initial thoughts for real estate entity structuring to maximize benefit deductions. A C-corp also has a 15% corporate tax rate on the first $50k of profits, so this can be an advantage when managed strategically, as well.

Bottom line is that health care insurance premiums are expensive, so ways to have it deductible by a business entity structure is preferrable to any individual schedule A limitations for medical expenses.

We set up our karate school as an S and were able to fully offset operating losses of the school against our day job income in its early years. Since it’s profitability increases every year, we’re reassessing our structures again and reviewing the addition of deductible benefits. We also have employees, so you can’t treat highly compensated employees differently for many things. But I don’t mind having this kind of problem.

The biggest advantage of the S-corp is the flow through of profits and losses against any ordinary income and avoiding the double taxation of a C-corp. Losses are limited to the basis in the company, so one needs to pay attention to basis. Basically, with an S, you pay yourself a nominal salary, as little as you can get away with that is “reasonable” in the eyes of the IRS. Profits that flow through are taxed at ordinary income rates but avoid FICA from both the company and shareholders. Distributions are then tax free since the taxes were paid each the year the profits were made. As you mentioned, real estate management can also be done with a C to maximize deductible benefits and still avoid the double taxation.

That’s why S-corps get audited a lot - if you pay yourself too little, the IRS will think you are avoiding payroll taxes. But S-corp losses within your basis can offset any ordinary income without income restrictions. With an LLC, you have the $25k loss limit that phases out from 100k-150k unless you meet the real estate professional status. Unallowed losses do get carried forward, though. So an S-corp could provide a means of shifting losses from non-deductible losses in an LLC to deductible in an S to offset ordinary income if done correctly.

So the business entity choices can also be affected by any ordinary income earned from other sources, particularly when you haven’t quit your day job and have a high income.

import · November 18, 2007, 7:56pm

Re: i don’t think - Posted by IB (NJ)

Posted by IB (NJ) on November 18, 2007 at 20:56:31:

Ah they don’t care. Too few sources out there in the media talking about the REAL issue: our diets and lifestyle. There’s also too many corporate controlled sources pumping BS about the food pyramid, how there’s no real difference between organic and non-organic foods, and how we can simply take a drug to control things that certain foods can cure.

My eyes finally opened while working in the pharmacuetical industry for 5 years. These companies make hundreds of millions of dollars with ONE DRUG. Simulataneously, food companies and farmers contaminate our food supply with dangerous chemicals and hormones. We consume the dangerous foods loaded with poisons and have to go begging to the drug companies for the expensive and false antidote.

Ib

import · November 18, 2007, 3:35am

Re: Just saw “SICKO” - Posted by Wayne-NC

Posted by Wayne-NC on November 18, 2007 at 04:35:29:

“I dont think anyone can come up with one government “program” that works REALLY well.”

That’s because the people in the government don’t work REALLY well! Too many holidays for one.

import · November 17, 2007, 6:10am

All states are different - Posted by Wayne-NC

Posted by Wayne-NC on November 17, 2007 at 07:10:59:

Some are good, some are bad and some are downright ugly. With insurance it is price + coverage= value.
You may have a good plan but it all depends on all the “bells and whistles, power windows, etc.” that you bought. Do you understand your coverage? Have you had to use it? Hope not but that is the wrong time to find out. The group plan concept is a good one. A larger group spreads the risk. Just keep in mind that no company is going to insure a house that is already on fire. Anyway, I was an insurance broker in the past. I really didn’t “sell” it, I taught people how to “buy” it. Then they made an informed decision in their purchase. A concept that worked quite well for me.

import · November 17, 2007, 10:48am

Re: Sure would like to know why? - Posted by The Central Scrutinizer

Posted by The Central Scrutinizer on November 17, 2007 at 11:48:05:

Why does he distrust conservatives? It depends on whether you include the Bush administration as conservative.

For the past six years they have spent money in a way that would make any self-respecting liberal blush.

Billions of dollars on an illegal war, and billions for close friends of the administration.

Use “liberal” as a dirty word all you want, but look at the facts.

import · November 20, 2007, 9:28am

But then again. . . - Posted by -Steve-

Posted by -Steve- on November 20, 2007 at 10:28:29:

…with all do respect.
how is the average Joe suppose to know this? I thought these high cost were for premium medical care. Sounds scamish and get what you can get to me.

import · November 20, 2007, 3:45am

Re: Response from a Doctor - Posted by Frank Chin

Posted by Frank Chin on November 20, 2007 at 04:45:45:

Dave:

Yes, I heard the arguments about people acting in their best interest, do price comparing, and this will lead to lower costs and better care.

But, as the son and daughter of parents in their 80’s, with my parents, and mother in law, both under insurance plans, I can see when this system breaks down.

When you’re crossing the street, and get hit by a car, you got no choice as to the ambulance service called by 911, or the hospital you go to. Got a customer of my business complaining that he went to the hopsital twice, suffered heart attacks both times, and called 911. The first time, the ambulance bill was over $300.00. The second time was over $900. He disputed the $900 bill, and was offered to settle for $600.00. There was insurance coverage of ambulance bills up to a certain amount.

I would have problems with a system where after suffering a heart attack, you have to argue with ambulance companies about the bill.

My mother in law is mentally competant, but needs assistance with her co-pays, and other complications of her health plans. My wife has to go over once a month, pick up the bills, review them, and often argue with the service providers.

I have a problem with a system that requires patients with children with masters degrees to review their bills.

My dad is not mentally competent, often does not know the day of the week. My brother does the same thing my wife does, reviews the bills, and assist in his handling of insurance. He is in no position to price compare and obtain the best deal for himself.

I have a problem with a system that requires citizes to price shop at a point in life when they are “incompetent”. Not everyone has grown children like my brother, who can come by every week.

I got a man, over 30 years of age working for me, that literally needs help tying his shoes. If this man can afford health insurance, he is certainly incompetent of price comparing, and making sure that he’s got health coverate

Bottomline

Our complex insurance maze is incapable of allowing our citizens obtaining the best, cost effective care.

Frank Chin