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Using a Roth Conversion to Minimize Future Income Tax Exposure

With the increase in Medicare taxes that goes into effect in 2013 and the high likelihood of increased tax rates in one form or another as a result of the ?Ç£fiscal cliff?Ç¥ negotiations, individuals may want to consider accelerating income into 2012 to avoid additional income tax exposure in 2013 and beyond.?á One way to accomplish this is through the conversion of funds in the individual?ÇÖs traditional individual retirement account (IRA) to a Roth IRA.?á A Roth conversion may also be transacted within an employer-sponsored 401(k) retirement plan, if the plan?ÇÖs terms permit it.?á Under this ?Ç£in-plan Roth rollover,?Ç¥ a plan participant can transfer all or part of his vested non-Roth account to a designated Roth account within the same plan.?á The amount converted is subject to federal income taxation in the year of conversion (except for any non-taxable basis in the converted amount), and, therefore, the participant must have… Continue Reading

Reinsurance Program Contribution Estimated to be $5.25/month per Covered Life

The Affordable Care Act establishes a transitional reinsurance program for 2014, 2015 and 2016 that requires health insurance issuers and self-funded group health plans to pay a reinsurance contribution based on the number of covered lives in the group health plan.?á In recent proposed rules, the Department of Health and Human Services (?Ç£HHS?Ç¥) estimated that there would be a per capita contribution rate of $5.25 per month for 2014.?á The proposed rules provide that the issuer or plan must submit to HHS the average number of covered lives under the plan for 2014 by November 15, 2014.?á HHS would then notify the plan of the actual amount of reinsurance contribution owed by the plan, and the plan would have 30 days to pay such contribution.?á The proposed rule can be found?áhere.

December 2012