Trading is not a legitimate business!

Discussion in 'Professional Trading' started by leapfrog, Jan 13, 2004.

  1. Here is an interesting one. I was denied health insurance under a group plan by Tufts Health Plan of Massachusetts on the basis that my activities were not a legitimate business since I am not "transacting commerce with third parties", according to them. Apparently a Schedule C and D did not impress them, nor an offer to speak with my accountant.

    The Small Business Services bureau are happy to accept me as a business so maybe another HMO would be an option - any suggestions/other experiences? Thanks in advance. - RCM.

  2. i would consult with a lawyer. sounds like classic discrimination to me.


  3. CalTrader

    CalTrader Guest

    find another group provider or educate this one ...... its no problem to get into a group plan. Tell them the federal government says you are a business and ask them to explain the discrepancy .....
  4. pspr


    Except for race or religion, discrimination is perfectly legal and is the natural way we conduct ourselves with others.


  5. sorry, that is inaccurate. a health insurance company is bound by certain rules and regulations. sometimes they need to be forced to do the right thing.


  6. pspr


    I don't think he will win this one. The rules don't bend enough.

  7. IMHO, as a physician, you might save a great deal by establishing a medical savings account. For healthy people, including families, the savings add up, compared to the endless out of pocket expenses. Flexible spending accounts help, but you have to get the amount right, otherwise you lose the surplus!

    Just a thought.

  8. agree. these guys broker an assortment of MSP's as well as traditonal plans.


  9. Hi RCM—

    The insurance provider’s position would come as a shock to Congress, the IRS, the federal courts, lawyers and accountants throughout the country. The body of case law where it has been determined that trading stocks or commodities CAN rise to the level of a business is voluminous. Congress recognized that by enacting IRS Section 475(f), which accords the mark-to-market election to traders [who, by definition, are trading for their own account and not for third persons; if they were trading for third persons, they would be “dealers” and would fall under a different but similar set of rules].

    One case out of hundreds that holds that a taxpayer’s trading activities constituted a business for purposes of the Internal Revenue Code is Levin vs. U.S., 597 F2d 760 (Ct. Cl. 1979). There are many other cases that hold the same. There is no requirement for third party transactions before an activity can be a business. This insurance company can impose whatever underwriting requirements it wants (as long as it does not violate regulations of the state insurance commissioner), but this “third party transactions” condition is without any foundation in the law.

    If you want to pursue this, I recommend you contact the state insurance commissioner’s office and file a complaint, if necessary.
  10. pspr


    Hey, there you go. There is always someone with the complete facts. But call the state ins. commission (they've saved my bacon more than once) but not a blood sucking lawyer.

    #10     Jan 13, 2004