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Paying someone's bills (medical) ?

1,454 Views | 7 Replies | Last: 5 yr ago by The Wonderer
PFG
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AG
Any financial no-no's to paying someone's medical bills? Is this treated like a financial gift?

Talking about a decent sum. Mid 5 figures.
Gigem_94
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AG
Most likely it would be treated as a gift by the IRS and subject to the restrictions and limitations. Best to speak with an accountant. There may be way to set up some sort of trust or other structure to get better tax treatment depending on how much and relationship of the parties but that's not my area of expertise.
combat wombat™
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AG
Pay the medical provider directly. There's a medical exemption for the gift tax limit. Paying the medical bills does count as a gift for gift tax. It's like free money. However, you need to pay the medical provider directly.

https://www.forbes.com/sites/markeghrari/2017/10/28/1-thing-you-definitely-need-to-know-about-the-gift-tax/
2wealfth Man
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AG
Interestingly enough, paying some else's health insurance premiums (directly) also qualifies for gift tax exclusion for health reasons.
combat wombat™
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Also excluded from the gift tax limitation is tuition for private schools as well as colleges, both private and public. It only covers tuition, not room board textbooks or supplies. And again, the payment has to be made directly to the school.
The Wonderer
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combat wombat said:

Pay the medical provider directly. There's a medical exemption for the gift tax limit. Paying the medical bills does count as a gift for gift tax. It's like free money. However, you need to pay the medical provider directly.

https://www.forbes.com/sites/markeghrari/2017/10/28/1-thing-you-definitely-need-to-know-about-the-gift-tax/
This. Also, be prepared to have the patient be required to provide a HIPAA release to the billing company allowing the payor to discuss the bills.
Zemira
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AG
My Dad did this for me this year although in total it was less than the gift tax limit, only about $3000 so far in insurance and a hospital bill payment.
combat wombat™
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You should be able to provide the payor with the remittance advice from your bill that they can send to the provider along with the check. They don't need a HIPAA waiver. They don't need to be able to discuss the bill. The patient can review the bill for accuracy.

You can sign the HIPAA waiver if you want. However, if you prefer to maintain your privacy with regard to the specific procedures are having done it's not a requirement for them to pay the bill.
The Wonderer
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combat wombat said:

You should be able to provide the payor with the remittance advice from your bill that they can send to the provider along with the check. They don't need a HIPAA waiver. They don't need to be able to discuss the bill. The patient can review the bill for accuracy.

You can sign the HIPAA waiver if you want. However, if you prefer to maintain your privacy with regard to the specific procedures are having done it's not a requirement for them to pay the bill.
Correct. I meant if you wanted to actually haggle the bill. Absolutely not required if just paying the bill straight.

Thanks for the catch and clarification. Didn't mean for it to sound like a requirement.
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