The recent financial troubles have been especially hard on small business owners and employees. As such, it has become especially important that you take full advantage of all the benefits that your coverage has to offer.
If you have a high deductible health plan coupled with a health savings account, there are a few things that you need to keep a close eye on. Having a health savings account style plan is a great way to save on insurance premiums and have your other health costs tax deducted, but you also have to pay careful attention what you are spending on health insurance unlike co-pay plan users.
First of all, make sure that you are searching for the best deal on your healthcare. With a high deductible health plan, you still only pay your carrier’s negotiated price, but their negotiated price is not necessarily the same at every physician’s office for the same services. Make sure that whenever possible you use your primary care provider rather than an urgent care facility or the emergency room. Emergency room visits tend to cost between $300 and $1000, urgent care visits around $150, and primary care visits between $30 and $50. These are significant savings. Another trick to minimizing your costs is to get your doctor to prescribe you only generics when possible.
Also, make sure that you present your insurance card when you visit the doctor or the pharmacy even if you have yet to meet your deductible. First of all, this will make sure that any expenses you incur will be applied towards you deductible. Second of all, presenting your card will ensure that you only pay your carrier’s negotiated rate.
Be sure to visit the IRS’s website and find their list of qualified expenses for Health Savings Account users so that you can take full advantage of your tax savings. Expenses such as dental care and over the counter drugs are eligible expenses. It pays to know.
Source
http://www.kiplinger.com/columns/ask/archive/2009/q0129.htm
http://www.kiplinger.com/magazine/archives/2007/05/insurance.html
Thursday, May 28, 2009
New COBRA Rules: Explained
The new stimulus law recently passed by congress provides a COBRA premium subsidy to assist recently terminated employees with the cost of their health insurance. The subsidy will cover 65% of the participant’s bill for up to nine months.
The new subsidy only applies to employees who lost or lose their job between September 1, 2008 and January 1, 2010. The law creating the subsidy requires that employers to notify all of their current COBRA participants of the new law. This notification can be handled through the group administrator or through a company’s COBRA benefits administrator such as Ceridian. Once the employees have been notified of the change they will have sixty days to notify their former employer of their decision to take coverage.
Only employees who lost their coverage due to involuntary termination are eligible for the COBRA premium subsidy. If you have employees who came off the group plan after September 1, 2008 they only apply to employees that were laid off involuntarily. If you had an employee leave your group plan due to voluntary termination, retirement, or a reduction in hours, they are not eligible for the COBRA premium subsidy. They are however, still eligible for regular COBRA coverage.
Employees who lost their coverage after September 1, 2008, but did not elect to take coverage at that time will have a second opportunity to elect coverage following the COBRA subsidy notice. COBRA coverage will still only be good for up to eighteen months from the date of their original qualifying event; their date of termination. The subsidy is good for up to and including nine months. After the nine months is up, the participants COBRA costs will return to the original cost. The participant will still be able to terminate their COBRA coverage anytime with-in the eighteen months that they are eligible for coverage. Once the participant reaches the eighteen month deadline, regardless of whether or not their nine month subsidy eligibility is up, they will no longer be able to be a COBRA participant on their former employer’s group coverage, meaning that they will have to find other coverage without the use of the stimulus subsidy.
Billing for subsidy participants will be much like normal COBRA billing except that the participant will only pay 35% of their total cost. The employer will cover the extra 65% of the cost. Once the bill has been paid the employer will deduct that 65%, plus any other COBRA subsidy participants’ 65% from wage withholding for their Federal Insurance Contributions Act (FICA) Payroll Tax. For instance, if your FICA taxes totaled $10,000 for a given period and the premium subsidies totaled $5000, your total tax load due to the government would be $5000. If your FICA taxes totaled to $5000 for a given period and the premium subsidies totaled $6000, the government would reimburse you that $1000 difference.
For the employer to claim these reimbursements from the IRS, they will be required to keep detailed supporting records for each COBRA subsidy participant. Your COBRA billing administrator (Ceridian) will keep track of which premiums have been received from participants as well as requiring individuals to certify their eligibility. Your administrator will then send you a monthly report detailing this information which you will be required to save as supporting record for your reimbursements from the government.
This is by no means a complete run-down of the changes made to the COBRA Omnibus under the American Recovery and Reinvestment Act, but these highlights should help you gain a better understanding of what these changes mean for you and your business. If you have any questions at all, please do not hesitate to call us and we will do our best to assist you.
Source
Ceridian
http://www.kiplinger.com/columns/ask/archive/2009/q0223.htm
The new subsidy only applies to employees who lost or lose their job between September 1, 2008 and January 1, 2010. The law creating the subsidy requires that employers to notify all of their current COBRA participants of the new law. This notification can be handled through the group administrator or through a company’s COBRA benefits administrator such as Ceridian. Once the employees have been notified of the change they will have sixty days to notify their former employer of their decision to take coverage.
Only employees who lost their coverage due to involuntary termination are eligible for the COBRA premium subsidy. If you have employees who came off the group plan after September 1, 2008 they only apply to employees that were laid off involuntarily. If you had an employee leave your group plan due to voluntary termination, retirement, or a reduction in hours, they are not eligible for the COBRA premium subsidy. They are however, still eligible for regular COBRA coverage.
Employees who lost their coverage after September 1, 2008, but did not elect to take coverage at that time will have a second opportunity to elect coverage following the COBRA subsidy notice. COBRA coverage will still only be good for up to eighteen months from the date of their original qualifying event; their date of termination. The subsidy is good for up to and including nine months. After the nine months is up, the participants COBRA costs will return to the original cost. The participant will still be able to terminate their COBRA coverage anytime with-in the eighteen months that they are eligible for coverage. Once the participant reaches the eighteen month deadline, regardless of whether or not their nine month subsidy eligibility is up, they will no longer be able to be a COBRA participant on their former employer’s group coverage, meaning that they will have to find other coverage without the use of the stimulus subsidy.
Billing for subsidy participants will be much like normal COBRA billing except that the participant will only pay 35% of their total cost. The employer will cover the extra 65% of the cost. Once the bill has been paid the employer will deduct that 65%, plus any other COBRA subsidy participants’ 65% from wage withholding for their Federal Insurance Contributions Act (FICA) Payroll Tax. For instance, if your FICA taxes totaled $10,000 for a given period and the premium subsidies totaled $5000, your total tax load due to the government would be $5000. If your FICA taxes totaled to $5000 for a given period and the premium subsidies totaled $6000, the government would reimburse you that $1000 difference.
For the employer to claim these reimbursements from the IRS, they will be required to keep detailed supporting records for each COBRA subsidy participant. Your COBRA billing administrator (Ceridian) will keep track of which premiums have been received from participants as well as requiring individuals to certify their eligibility. Your administrator will then send you a monthly report detailing this information which you will be required to save as supporting record for your reimbursements from the government.
This is by no means a complete run-down of the changes made to the COBRA Omnibus under the American Recovery and Reinvestment Act, but these highlights should help you gain a better understanding of what these changes mean for you and your business. If you have any questions at all, please do not hesitate to call us and we will do our best to assist you.
Source
Ceridian
http://www.kiplinger.com/columns/ask/archive/2009/q0223.htm
Our New Website
We are very proud to announce that earlier this year we released our first website, http://www.quotepinnacle.com, dedicated to providing our clients with all the information they need to make the best decision when it comes to their insurance needs. We wanted to take a few minutes to highlight the features that you may find useful, or at least we hope you will!
On our Business Resources page you will find all the information that you need to assist you in handling new enrollments and terminations along with tips for dealing with COBRA or state continuation and contact numbers for carriers. You will also find an updated list of forms from our carriers.
Our Health and Wellness page is dedicated to improving the overall health and wellbeing of our customers. On this page you will find information about our in-house Small Business Wellness Program as well as resources for the healthy individual.
The Health Savings Account Resource are of our website is dedicated to consumer driven health insurance. We believe in the validity of high deductible health plans and their accompanying health savings accounts, especially for our younger clientele. On this page you will find all the information you ever wanted to know about these types of plans as well as why we think they are right for so many individuals and why they are so often overlooked.
Finally, our Group and Individual Coverage pages are dedicated to the products we have available for our clients and our potential clients. On these pages you can view the carriers we work with along with all the different types of products we offer. You can also request a quote directly from our site!
On our Business Resources page you will find all the information that you need to assist you in handling new enrollments and terminations along with tips for dealing with COBRA or state continuation and contact numbers for carriers. You will also find an updated list of forms from our carriers.
Our Health and Wellness page is dedicated to improving the overall health and wellbeing of our customers. On this page you will find information about our in-house Small Business Wellness Program as well as resources for the healthy individual.
The Health Savings Account Resource are of our website is dedicated to consumer driven health insurance. We believe in the validity of high deductible health plans and their accompanying health savings accounts, especially for our younger clientele. On this page you will find all the information you ever wanted to know about these types of plans as well as why we think they are right for so many individuals and why they are so often overlooked.
Finally, our Group and Individual Coverage pages are dedicated to the products we have available for our clients and our potential clients. On these pages you can view the carriers we work with along with all the different types of products we offer. You can also request a quote directly from our site!
New Happenings at Pinnacle Benefits Group
Over the last few months we have made a lot of changes here at Pinnacle Benefits Group in an effort to increase our utility to our clients and other individuals and small business owners. We are focusing on ways to try and improve our business without sacrificing our current level of service.
The first and largest change we are making is the addition of property and liability insurance products to our current line of products. Effective the first of this year we are offering commercial general liability and worker’s compensation insurance along with a full line of personal home, auto, and marine insurance. Just like our other products, we work with most of the top carriers in North Carolina to bring you a comprehensive look at what the market has to offer.
We are also proud to announce that our new website is up and running and you can check it out at http://www.quotepinnacle.com. For a full look at the features on our website, take a look at the Our New Website article in this issue of our Quarterly Newsletter.
Last, but not least, we will be unveiling our new logo and company letterhead in the next few weeks. We feel that our new logo will reflect our distinctness in our market. We are not like the majority of insurance agencies that have yet to see the changing tides in the Insurance industry. As we’ve featured in our earlier newsletters, something has to give in the health care market in the near future. Americans are becoming less and less healthy while healthcare costs and insurance premiums are shooting through the roof. Our current status cannot be maintained for much longer. That’s why in the last few years we have tried to focus more on consumer driven health products like high deductible health plans coupled with health savings accounts. In addition, we are developing plans for our clients that advocate healthier lifestyles. Healthcare is always going to be expensive, but statistically the healthier you are the less likely you are to need it.
All of these changes have one goal in mind; giving you all the tools you need to make the best decisions for you and your family when it comes to your insurance needs.
The first and largest change we are making is the addition of property and liability insurance products to our current line of products. Effective the first of this year we are offering commercial general liability and worker’s compensation insurance along with a full line of personal home, auto, and marine insurance. Just like our other products, we work with most of the top carriers in North Carolina to bring you a comprehensive look at what the market has to offer.
We are also proud to announce that our new website is up and running and you can check it out at http://www.quotepinnacle.com. For a full look at the features on our website, take a look at the Our New Website article in this issue of our Quarterly Newsletter.
Last, but not least, we will be unveiling our new logo and company letterhead in the next few weeks. We feel that our new logo will reflect our distinctness in our market. We are not like the majority of insurance agencies that have yet to see the changing tides in the Insurance industry. As we’ve featured in our earlier newsletters, something has to give in the health care market in the near future. Americans are becoming less and less healthy while healthcare costs and insurance premiums are shooting through the roof. Our current status cannot be maintained for much longer. That’s why in the last few years we have tried to focus more on consumer driven health products like high deductible health plans coupled with health savings accounts. In addition, we are developing plans for our clients that advocate healthier lifestyles. Healthcare is always going to be expensive, but statistically the healthier you are the less likely you are to need it.
All of these changes have one goal in mind; giving you all the tools you need to make the best decisions for you and your family when it comes to your insurance needs.
Why You Need a Roth IRA
“With this indispensable savings tool, your money grows tax-free, you can invest in almost anything, and you get several cool perks.”
-The Kiplinger Report
A Roth IRA very well may be the most versatile investment tool available for young adults. While the relatively low income limits on a Roth IRA mean that you won’t be able to use them forever, the flexibility they offer make them the perfect tool to begin your investment career.
First, let’s go over the rules for utilizing a Roth IRA. Only earned income is eligible for deposit in a Roth IRA, meaning that any money not earned through a paying job cannot be deposited into a Roth IRA. Single filers making less than $105,000 per year and joint filers making less than $166,000 per year can contribute up to $5,000 per year into a Roth IRA. If you are single and you make more than $105,000 per year or if you file jointly and have a combined income of more than $166,000 then your contribution will be limited. At an income level of $120,000 for singles and $176,000 for couples, you can no longer contribute to a Roth IRA. If you already have a Roth and reach those limits, you do not have to cash the account out; you simply cannot contribute to the account any longer.
Roth IRA’s offer enormous tax advantages as well. Any funds deposited into a Roth IRA are completely tax free if you wait until retirement to remove the money. If you do remove your money before retirement, you can withdraw any contributions tax free without penalty. However, if you withdraw any of the earnings from the account before retirement, they will be subject to taxing as well as a 10% early withdrawal fee. In addition to the tax advantages of a Roth IRA, account holders can use their contributions for things like purchasing their first home or saving for their children’s college tuition tax free. In addition, the Roth IRA will function as an emergency fund in a pinch since contributions can be withdrawn tax free at any time as long as any earnings on the account are left in.
Beginning in 2008, the IRS will allow Roth account holders to withdraw up to $10,000 including earnings, tax and penalty free, for the purchase of a first home. To qualify for this tax break, the account must be open for at least five years, meaning if you open an account for 2009, you could use your contributions and earnings towards the purchase of your first home as early as January 2014. The $10,000 limit is per person, so a couple could withdraw up to $20,000.
You can also use a Roth IRA to save for your children’s college if your income level does not allow for contributions to both a retirement fund and a college savings fund. In addition to being able to withdraw contributions at any time tax and penalty free, you can withdraw your earnings penalty free if you use the money for college tuition. You’ll still have to pay taxes on any earnings you use for college tuition, but you can avoid the 10% early-withdrawal penalty.
Any way you cut it, a Roth IRA is an incredibly versatile savings and investment tool. From saving for college to buying your first house, a Roth IRA will allow you to save your money, tax free, while still having access to your contributions at any time, penalty free.
Source
http://www.kiplinger.com/columns/starting/archive/2006/st0309.htm
http://www.irs.gov
-The Kiplinger Report
A Roth IRA very well may be the most versatile investment tool available for young adults. While the relatively low income limits on a Roth IRA mean that you won’t be able to use them forever, the flexibility they offer make them the perfect tool to begin your investment career.
First, let’s go over the rules for utilizing a Roth IRA. Only earned income is eligible for deposit in a Roth IRA, meaning that any money not earned through a paying job cannot be deposited into a Roth IRA. Single filers making less than $105,000 per year and joint filers making less than $166,000 per year can contribute up to $5,000 per year into a Roth IRA. If you are single and you make more than $105,000 per year or if you file jointly and have a combined income of more than $166,000 then your contribution will be limited. At an income level of $120,000 for singles and $176,000 for couples, you can no longer contribute to a Roth IRA. If you already have a Roth and reach those limits, you do not have to cash the account out; you simply cannot contribute to the account any longer.
Roth IRA’s offer enormous tax advantages as well. Any funds deposited into a Roth IRA are completely tax free if you wait until retirement to remove the money. If you do remove your money before retirement, you can withdraw any contributions tax free without penalty. However, if you withdraw any of the earnings from the account before retirement, they will be subject to taxing as well as a 10% early withdrawal fee. In addition to the tax advantages of a Roth IRA, account holders can use their contributions for things like purchasing their first home or saving for their children’s college tuition tax free. In addition, the Roth IRA will function as an emergency fund in a pinch since contributions can be withdrawn tax free at any time as long as any earnings on the account are left in.
Beginning in 2008, the IRS will allow Roth account holders to withdraw up to $10,000 including earnings, tax and penalty free, for the purchase of a first home. To qualify for this tax break, the account must be open for at least five years, meaning if you open an account for 2009, you could use your contributions and earnings towards the purchase of your first home as early as January 2014. The $10,000 limit is per person, so a couple could withdraw up to $20,000.
You can also use a Roth IRA to save for your children’s college if your income level does not allow for contributions to both a retirement fund and a college savings fund. In addition to being able to withdraw contributions at any time tax and penalty free, you can withdraw your earnings penalty free if you use the money for college tuition. You’ll still have to pay taxes on any earnings you use for college tuition, but you can avoid the 10% early-withdrawal penalty.
Any way you cut it, a Roth IRA is an incredibly versatile savings and investment tool. From saving for college to buying your first house, a Roth IRA will allow you to save your money, tax free, while still having access to your contributions at any time, penalty free.
Source
http://www.kiplinger.com/columns/starting/archive/2006/st0309.htm
http://www.irs.gov
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