Without a doubt, the healthcare system in the United States is flawed. Economists have predicted that within the next seventy-five years our country’s health expenses will equal our country’s gross domestic product. Our nation is aging and our health is declining. Healthcare costs rise with each passing day.
While we understand that our healthcare system will not change overnight, we believe that the change must begin on a smaller scale to ever hope to see a change on a larger scale. In response to this belief we have decided to implement a voluntary employee wellness plan for our clients. We believe that the only way to positively affect the healthcare system over the long-term is to improve the overall well-being of those of us who utilize it.
Over the next few months, we plan to introduce our wellness initiative to each of our clients. If you would be interested in participating in a program to improve the wellness of your employees and reduce your healthcare costs in the long-term, give us a call and we will sit down with you and tailor a plan to fit your business.
Source
http://www.cbo.gov/ftpdocs/89xx/doc8948/01-31-HealthTestimony.pdf
Wednesday, October 1, 2008
Wednesday, September 24, 2008
Seeding Your Employees' HSA's
The recent boom in health savings account style health plans has lead to some concern that many employees are not utilizing the plans as they are designed to be used. United Healthcare recently made public a study of 212,000 of their HSA customers that shows a few prominent trends in employee usage of health savings accounts.
While there are many tax advantages to contributing money to health savings accounts, many employees are reluctant to do so because they either don’t understand the benefits or they are not willing to put their hard-earned income towards their health expenses before they occur. This can be a problem for many individuals. Health savings accounts are generally paired with high deductible health plans which can mean high out-of-pocket expenses for employees if they have not planned ahead and utilized their HSA.
One easy way to encourage your employees to actually use their health savings accounts is to offer some type of employer contribution, like seed money for the account. The United Healthcare survey showed that 86% of employees opened an HSA when their employer offered a contribution compared to just 27% when their employer did not. United Healthcare’s survey also reported that nearly two-thirds of all employers offering HSA-type accounts to their employees did offer a contribution.
Source
http://blogs.wsj.com/health/2008/09/19/employees-open-hsas-if-their-bosses-kick-in/
While there are many tax advantages to contributing money to health savings accounts, many employees are reluctant to do so because they either don’t understand the benefits or they are not willing to put their hard-earned income towards their health expenses before they occur. This can be a problem for many individuals. Health savings accounts are generally paired with high deductible health plans which can mean high out-of-pocket expenses for employees if they have not planned ahead and utilized their HSA.
One easy way to encourage your employees to actually use their health savings accounts is to offer some type of employer contribution, like seed money for the account. The United Healthcare survey showed that 86% of employees opened an HSA when their employer offered a contribution compared to just 27% when their employer did not. United Healthcare’s survey also reported that nearly two-thirds of all employers offering HSA-type accounts to their employees did offer a contribution.
Source
http://blogs.wsj.com/health/2008/09/19/employees-open-hsas-if-their-bosses-kick-in/
Monday, September 22, 2008
Tax Deduction Tips
They say there are two things in life that are inevitable: death and taxes. While this is certainly true in our society, there are a few ways that you can avoid giving all of your hard earned cash to the government.
If you currently have a Health Savings Account and you are self-employed, you can use an “above-the-line” deduction to reduce your taxable income by the amount of your total contribution, up to the limits set in place for those contributions. If you have a Health Savings Account through your employer, any contributions made by your employer are taken out before your taxable income. If you make any contributions of your own, they can be taken out with an “above-the-line” deduction up to the total contribution limit.
In addition, any medical expenses you incur more than 7.5% of your adjusted gross income can be deducted from your taxes in a similar manner. The Internal Revenue Service defines medical expenses as any expense used to treat or prevent any mental or physical defect. This is a broad definition, for more details refer to the publication listed in the source of this article. While health, dental, and long-term care insurance premiums are deductible, any expense paid out of a health savings account or Archer medical savings account is not deductible.
While there are many expenses associated with your healthcare that are deductible from your taxes, consult a tax professional before filing your return.
Source
http://www.ustreas.gov/offices/public-affairs/hsa/faq_contributing.shtml
http://www.irs.gov/publications/p502/ar02.html
If you currently have a Health Savings Account and you are self-employed, you can use an “above-the-line” deduction to reduce your taxable income by the amount of your total contribution, up to the limits set in place for those contributions. If you have a Health Savings Account through your employer, any contributions made by your employer are taken out before your taxable income. If you make any contributions of your own, they can be taken out with an “above-the-line” deduction up to the total contribution limit.
In addition, any medical expenses you incur more than 7.5% of your adjusted gross income can be deducted from your taxes in a similar manner. The Internal Revenue Service defines medical expenses as any expense used to treat or prevent any mental or physical defect. This is a broad definition, for more details refer to the publication listed in the source of this article. While health, dental, and long-term care insurance premiums are deductible, any expense paid out of a health savings account or Archer medical savings account is not deductible.
While there are many expenses associated with your healthcare that are deductible from your taxes, consult a tax professional before filing your return.
Source
http://www.ustreas.gov/offices/public-affairs/hsa/faq_contributing.shtml
http://www.irs.gov/publications/p502/ar02.html
Friday, September 19, 2008
State Continuation Tips
Employees and their dependents have the option to continue group coverage for 18 months from the date that they cease to be eligible for coverage under the health benefit plan. Employees are not eligible for continuation under the state law if:
• The employee’s insurance terminated because they failed to pay the appropriate contribution.
• The employee or their dependents requesting continuation are eligible for another group health benefit plan.
• The employee was covered less that three consecutive months prior to termination.
The member must notify the group of the intention to continue coverage and pay the applicable fees within 60 days following the end of eligibility. Upon the receipt of the notice of continuation and applicable fees, Blue Cross Blue Shield of North Carolina will reinstate coverage back to the date eligibility ended. The state law continuation benefits run concurrently and not in addition to any applicable federal continuation rights.
Group continuation under state law will end after 18 months or earlier if:
• The employer ceases to provide health benefit plans to employees
• The continuing person fails to pay the monthly fee
• The continuing person obtains similar coverage under another group plan
If an employee elects North Carolina State Continuation, an Enrollment and Change Form stating this fact must be submitted to the carrier.
• The employee’s insurance terminated because they failed to pay the appropriate contribution.
• The employee or their dependents requesting continuation are eligible for another group health benefit plan.
• The employee was covered less that three consecutive months prior to termination.
The member must notify the group of the intention to continue coverage and pay the applicable fees within 60 days following the end of eligibility. Upon the receipt of the notice of continuation and applicable fees, Blue Cross Blue Shield of North Carolina will reinstate coverage back to the date eligibility ended. The state law continuation benefits run concurrently and not in addition to any applicable federal continuation rights.
Group continuation under state law will end after 18 months or earlier if:
• The employer ceases to provide health benefit plans to employees
• The continuing person fails to pay the monthly fee
• The continuing person obtains similar coverage under another group plan
If an employee elects North Carolina State Continuation, an Enrollment and Change Form stating this fact must be submitted to the carrier.
The Number of Uninsured Americans Is On the Decline
You may have read recently that the United States Census Bureau has reported a decrease in the number of uninsured Americans from 2006 to 2007. Here are a few quick facts to put that statement into perspective.
The number of uninsured children declined from 8.7 million (11.7 percent in 2006 to 8.1 million (11.0 percent) in 2007.
The number of uninsured non-hispanic whites declined from 21.2 million (10.8 percent) in 2006 to 20.5 million (10.4 percent) in 2007.
The number of uninsured blacks remained statistically unchanged at 7.4 million while the percentage declined from 20.5 percent in 2006 to 19.5 percent in 2007.
The number of uninsured hispanics declined from 15.3 million (34.1 percent) in 2006 to 14.8 million (32.1 percent) in 2007.
The number of uninsured children declined from 8.7 million (11.7 percent in 2006 to 8.1 million (11.0 percent) in 2007.
The number of uninsured non-hispanic whites declined from 21.2 million (10.8 percent) in 2006 to 20.5 million (10.4 percent) in 2007.
The number of uninsured blacks remained statistically unchanged at 7.4 million while the percentage declined from 20.5 percent in 2006 to 19.5 percent in 2007.
The number of uninsured hispanics declined from 15.3 million (34.1 percent) in 2006 to 14.8 million (32.1 percent) in 2007.
Growing Your Business
Regardless of industry, everyone has felt the economic slowdown of late, whether they are captains of industry or your everyday small business. Do not get discouraged, there are plenty of things you can do to help keep your business viable during the downturn and prepare your business for success during the upturn that is sure to follow.
Discipline as a Foundation
In a recent article from Entrepreneur Magazine, Carol Tice reports that “discipline developed in a downturn can lay the groundwork for long-term success.” Basically, a slowdown in business will often force you to reexamine your business tactics and develop new ways to generate revenue. If these tactics are retained when the market returns your business will often flourish.
Reexamine Your Business Model
Is your business model still viable? Maybe it is, but often as time goes on your business outgrows your original model. Getting a business of the ground can be a challenging task, and once you have successfully launched your business it is easy to allow your plans to become static, especially once you have a steady cash flow. While you are considering new ways to generate revenue, look in to revamping your business model to target unexplored opportunities.
Diversify Your Marketing
When cash flow is an issue, it may be hard to justify spending money on new marketing projects, but when the economy turns down it is imperative that your company’s name remains in front of both your current and potential customers. Remember, a slow economy has everyone looking for ways to cut their spending, so you need to remind your current customers of the value of your product and let potential customers know that their money will be well spent.
In an article titled “Do the Two-Step” written by John Jantsch we can see an innovative marketing technique that may be useful for small businesses trying to diversify their marketing. “…every business needs leads; they’re the lifeblood of your marketing machine.” Jantsch claims that his “two-step” marketing plan can produce new leads without any cold-calling. His plan is fairly simple. Create a free information product, such as a workshop or newsletter, and make it available to your target market. If you direct all of your marketing efforts at signing up customers for your information product, you will be left with a list of prospects who are interested in your company and your product. “…they’re effectively raising their hand and identifying themselves as being interested,” and “the hardest part of [the] sales job is done.”
Stay Positive
Just because the market is down, it does not mean that your business has to be down as well. In fact, Andy Birol of Birol Growth Consulting says that many niches often pull through a downturn completely unscathed. The secret is to find those niches and use them to your advantage. “Don’t assume demand has vaporized,” he says. “It hasn’t, but the way demand is getting met has changed.”
Source
http://www.entrepreneur.com/magazine/entrepreneur/2008/august/195590.html
http://www.entrepreneur.com/magazine/entrepreneur/2008/august/195720.html
Discipline as a Foundation
In a recent article from Entrepreneur Magazine, Carol Tice reports that “discipline developed in a downturn can lay the groundwork for long-term success.” Basically, a slowdown in business will often force you to reexamine your business tactics and develop new ways to generate revenue. If these tactics are retained when the market returns your business will often flourish.
Reexamine Your Business Model
Is your business model still viable? Maybe it is, but often as time goes on your business outgrows your original model. Getting a business of the ground can be a challenging task, and once you have successfully launched your business it is easy to allow your plans to become static, especially once you have a steady cash flow. While you are considering new ways to generate revenue, look in to revamping your business model to target unexplored opportunities.
Diversify Your Marketing
When cash flow is an issue, it may be hard to justify spending money on new marketing projects, but when the economy turns down it is imperative that your company’s name remains in front of both your current and potential customers. Remember, a slow economy has everyone looking for ways to cut their spending, so you need to remind your current customers of the value of your product and let potential customers know that their money will be well spent.
In an article titled “Do the Two-Step” written by John Jantsch we can see an innovative marketing technique that may be useful for small businesses trying to diversify their marketing. “…every business needs leads; they’re the lifeblood of your marketing machine.” Jantsch claims that his “two-step” marketing plan can produce new leads without any cold-calling. His plan is fairly simple. Create a free information product, such as a workshop or newsletter, and make it available to your target market. If you direct all of your marketing efforts at signing up customers for your information product, you will be left with a list of prospects who are interested in your company and your product. “…they’re effectively raising their hand and identifying themselves as being interested,” and “the hardest part of [the] sales job is done.”
Stay Positive
Just because the market is down, it does not mean that your business has to be down as well. In fact, Andy Birol of Birol Growth Consulting says that many niches often pull through a downturn completely unscathed. The secret is to find those niches and use them to your advantage. “Don’t assume demand has vaporized,” he says. “It hasn’t, but the way demand is getting met has changed.”
Source
http://www.entrepreneur.com/magazine/entrepreneur/2008/august/195590.html
http://www.entrepreneur.com/magazine/entrepreneur/2008/august/195720.html
Health Savings Accounts and You
Health plans including Health Savings Accounts (HSA’s) are among the hottest trends in the group health insurance today. There are many reasons for the explosion of popularity HSA’s have seen since they’re creation in 2003 which we will examine, but first let’s look at the numbers.
The Numbers
In November of 2004 the American Health Insurance Providers (AHIP) reported 438,000 individuals enrolled in HSA-type plans. In January of 2008 AHIP reported 6.1 million individuals covered under HSA-type health plans. That’s nearly a 1400% increase in just three years. In the last year HSA-type plans have made up 27% of the new purchases of health insurance products in the individual market and 31% of the new purchases in the small group market. In fact, small group coverage is the fastest growing market segment for HSA-type plans. This rapid growth shows no signs of diminishing either. The US Treasury Department projects 14 million individuals will be enrolled in HSA-type health plans by the year 2010. So what has caused all of this growth? Let’s take a look at what an HSA-type health plan is and its origins.
What is a HSA?
HSA-Type health plans were created by the Medicare bill signed into law by President Bush on December 8, 2003. They were modeled after Archer Medical Savings Accounts, which were discontinued as of December 31, 2003. An HSA is a special account much like your IRA that is used to pay for qualified medical expenses. By law, HSA’s are paired with High Deductible Health Plans (HDHP’s) that do not cover first dollar medical expenses except in the case of preventative care. This simply means these health plans have no co-pay’s and all benefits offered under the plan are subject to the plan’s deductible. To qualify as a HDHP a health plan must have an individual deductible of at least $1100 and a family deductible of at least $2200. Those values are adjusted each year for inflation. Usually the HDHP that carriers pair with HSA’s are 100% coverage after the deductible, so the maximum out of pocket for the plan is the deductible. Many first dollar coverage plans (i.e. co-pay plans) do not cover 100% of the costs after the deductible is met. Many cover anywhere from 80% all the way down to just 50% of total expenses. When this occurs the insured’s costs are subject to the plan’s maximum out of pocket, which can often be two or three times the deductible.
Am I eligible?
Eligibility for an HSA-type health plan has several requirements. The first is the individual must not be enrolled in Medicare. The individual must also not be able to be claimed as a dependent on someone else’s tax returns. There is no income limit for individuals enrolling in an HSA-type plan. Individuals are also not permitted to have any other health insurance except for specific disease or illness coverage, disability coverage, dental care, vision care, and qualifying long-term care insurance. If an individual meets these requirements then he or she is eligible for HSA-type health insurance.
How do I use my HSA?
As stated above, an HSA is like an IRA for your future medical expenses. The contributions that an individual makes to his or her HSA are tax deductible and the medical expenses paid for from an HSA are tax exempt. Any expense paid from an HSA must meet the criteria for “qualified medical expenses.” These medical expenses include most any expense an individual would incur in the treatment of an ailment, including over-the-counter medicine. For a complete list of qualified expenses, check http://www.irs.gov . If funds from an HSA are used for something other than qualified medical expenses they are then added to an individual’s taxable income and a 10% penalty fee must be paid to the Internal Revenue Service. There are also contribution limits for a HSA, much like an IRA. For 2008, the individual plan limit is $2900 which will increase to $3000 next year and the family plan limit is $5800 which will increase to $5950 next year. Individuals who are between the ages of 55 and 65 are allowed to make additional “catch-up” contributions that amount to $900 for this year and $1000 for 2009.
A few things too keep in mind
Once an individual sets up an HSA its contents are fully vested. There are no “use it or lose it” penalties and changing health plans will not forfeit the funds already in an HSA. The same investment options and limitations used for IRA’s apply to HSA’s. Also, rollovers from other HSA’s or older MSA’s are permitted much like an IRA and they are limited to one per year. Tax-free distributions for qualified medical expenses can be taken for the HSA owner as well as their spouse or dependant even if the spouse or dependant is not covered under the HSA owner’s health plan. And one last thing to keep in mind is that qualified medical expenses do not include other health insurance premiums except for COBRA plans, any health plan an individual uses while receiving unemployment payments, and individuals enrolled in Medicare (however Medicare supplement premiums are not covered).
Interested?
So, if you think an HSA-type plan is something you or your company may be interested in, give us a call and we will go over some options with you and let you know what types of plans have worked well for our other clients.
Resources:
http://www.hsabank.com
This site contains an investment calculator and a comparison tool where you can see if an HSA-type plan will save you money in the long-term.
Source:
http://www.ustreas.gov/offices/public-affairs/hsa/pdf/all-about-HSAs-072208.pdf
http://www.ustreas.gov/offices/public-affairs/hsa/pdf/fact-sheet-dramatic-growth.pdf
http://www.ahipresearch.org/pdfs/2008_HSA_Census.pdf
http://www.irs.gov/pub/irs-pdf/p969.pdf
The Numbers
In November of 2004 the American Health Insurance Providers (AHIP) reported 438,000 individuals enrolled in HSA-type plans. In January of 2008 AHIP reported 6.1 million individuals covered under HSA-type health plans. That’s nearly a 1400% increase in just three years. In the last year HSA-type plans have made up 27% of the new purchases of health insurance products in the individual market and 31% of the new purchases in the small group market. In fact, small group coverage is the fastest growing market segment for HSA-type plans. This rapid growth shows no signs of diminishing either. The US Treasury Department projects 14 million individuals will be enrolled in HSA-type health plans by the year 2010. So what has caused all of this growth? Let’s take a look at what an HSA-type health plan is and its origins.
What is a HSA?
HSA-Type health plans were created by the Medicare bill signed into law by President Bush on December 8, 2003. They were modeled after Archer Medical Savings Accounts, which were discontinued as of December 31, 2003. An HSA is a special account much like your IRA that is used to pay for qualified medical expenses. By law, HSA’s are paired with High Deductible Health Plans (HDHP’s) that do not cover first dollar medical expenses except in the case of preventative care. This simply means these health plans have no co-pay’s and all benefits offered under the plan are subject to the plan’s deductible. To qualify as a HDHP a health plan must have an individual deductible of at least $1100 and a family deductible of at least $2200. Those values are adjusted each year for inflation. Usually the HDHP that carriers pair with HSA’s are 100% coverage after the deductible, so the maximum out of pocket for the plan is the deductible. Many first dollar coverage plans (i.e. co-pay plans) do not cover 100% of the costs after the deductible is met. Many cover anywhere from 80% all the way down to just 50% of total expenses. When this occurs the insured’s costs are subject to the plan’s maximum out of pocket, which can often be two or three times the deductible.
Am I eligible?
Eligibility for an HSA-type health plan has several requirements. The first is the individual must not be enrolled in Medicare. The individual must also not be able to be claimed as a dependent on someone else’s tax returns. There is no income limit for individuals enrolling in an HSA-type plan. Individuals are also not permitted to have any other health insurance except for specific disease or illness coverage, disability coverage, dental care, vision care, and qualifying long-term care insurance. If an individual meets these requirements then he or she is eligible for HSA-type health insurance.
How do I use my HSA?
As stated above, an HSA is like an IRA for your future medical expenses. The contributions that an individual makes to his or her HSA are tax deductible and the medical expenses paid for from an HSA are tax exempt. Any expense paid from an HSA must meet the criteria for “qualified medical expenses.” These medical expenses include most any expense an individual would incur in the treatment of an ailment, including over-the-counter medicine. For a complete list of qualified expenses, check http://www.irs.gov . If funds from an HSA are used for something other than qualified medical expenses they are then added to an individual’s taxable income and a 10% penalty fee must be paid to the Internal Revenue Service. There are also contribution limits for a HSA, much like an IRA. For 2008, the individual plan limit is $2900 which will increase to $3000 next year and the family plan limit is $5800 which will increase to $5950 next year. Individuals who are between the ages of 55 and 65 are allowed to make additional “catch-up” contributions that amount to $900 for this year and $1000 for 2009.
A few things too keep in mind
Once an individual sets up an HSA its contents are fully vested. There are no “use it or lose it” penalties and changing health plans will not forfeit the funds already in an HSA. The same investment options and limitations used for IRA’s apply to HSA’s. Also, rollovers from other HSA’s or older MSA’s are permitted much like an IRA and they are limited to one per year. Tax-free distributions for qualified medical expenses can be taken for the HSA owner as well as their spouse or dependant even if the spouse or dependant is not covered under the HSA owner’s health plan. And one last thing to keep in mind is that qualified medical expenses do not include other health insurance premiums except for COBRA plans, any health plan an individual uses while receiving unemployment payments, and individuals enrolled in Medicare (however Medicare supplement premiums are not covered).
Interested?
So, if you think an HSA-type plan is something you or your company may be interested in, give us a call and we will go over some options with you and let you know what types of plans have worked well for our other clients.
Resources:
http://www.hsabank.com
This site contains an investment calculator and a comparison tool where you can see if an HSA-type plan will save you money in the long-term.
Source:
http://www.ustreas.gov/offices/public-affairs/hsa/pdf/all-about-HSAs-072208.pdf
http://www.ustreas.gov/offices/public-affairs/hsa/pdf/fact-sheet-dramatic-growth.pdf
http://www.ahipresearch.org/pdfs/2008_HSA_Census.pdf
http://www.irs.gov/pub/irs-pdf/p969.pdf
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