Tilted Forum Project Discussion Community - View Single Post - The House has Passed the Healthcare Reform Bill

aceventura3 · 11-09-2009, 08:04 AM

Question: How long does it take for people to figure out how to exploit the loop holes in the bill? A loop hole that can affect the intent of the bill and alter the assumptions used for costs and coverage.

Answer: Less time than it takes to change a light bulb.

Just for kicks: Let's say we have a Cement contractor (small business), and the guy has about $2,000,000 per year in revenue. He nets about (being generous 25%) $500,000 of personal income and he is single. He runs a payroll of $500,000. He does not offer his employees health insurance and would be subject to the 8% "surcharge"/tax or whatever it is. That amounts to $40,000, right off of his bottom line of $500,000, effectively a tax of 8% of his income.

I am an entrepreneur. I go to him and say; let me set up two employee leasing companies for you. Half your payroll in company A and half in company B and then I lease your employees to you, with a 4% admin charge for me. So I have two companies with a payroll of $250,00 and I lease them to you for $260,000. Oh, and we don't need to offer health insurance or pay the 8% (let them go on the public plan). He saves $20,000 and I make $20,000. He has a 4% advantage over his similarly situated competition who do not do this ( and of course I go to his competition and do the same thing), and the government doesn't get anything, and the employees go on the public plan.

Oh, how I love capitalism, especially when the foolish or short-sighted run Washington.

P.S. - this is not actually a new concept, PEO's took off big time in the California market when Work comp premiums were going through the roof. But this would be a new application.

11-09-2009, 08:04 AM	#27 (permalink)
aceventura3 Junkie Location: Ventura County	The 8% Loop Hole Question: How long does it take for people to figure out how to exploit the loop holes in the bill? A loop hole that can affect the intent of the bill and alter the assumptions used for costs and coverage. Answer: Less time than it takes to change a light bulb. Just for kicks: Let's say we have a Cement contractor (small business), and the guy has about $2,000,000 per year in revenue. He nets about (being generous 25%) $500,000 of personal income and he is single. He runs a payroll of $500,000. He does not offer his employees health insurance and would be subject to the 8% "surcharge"/tax or whatever it is. That amounts to $40,000, right off of his bottom line of $500,000, effectively a tax of 8% of his income. I am an entrepreneur. I go to him and say; let me set up two employee leasing companies for you. Half your payroll in company A and half in company B and then I lease your employees to you, with a 4% admin charge for me. So I have two companies with a payroll of $250,00 and I lease them to you for $260,000. Oh, and we don't need to offer health insurance or pay the 8% (let them go on the public plan). He saves $20,000 and I make $20,000. He has a 4% advantage over his similarly situated competition who do not do this ( and of course I go to his competition and do the same thing), and the government doesn't get anything, and the employees go on the public plan. Oh, how I love capitalism, especially when the foolish or short-sighted run Washington. P.S. - this is not actually a new concept, PEO's took off big time in the California market when Work comp premiums were going through the roof. But this would be a new application. __________________ "Democracy is two wolves and a sheep voting on lunch." "It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion." "If you live among wolves you have to act like one." "A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers." Last edited by aceventura3; 11-09-2009 at 08:08 AM..