Tax Credit for Small Businesses
Starting in 2011, small businesses may earn a tax credit for providing health insurance if they meet the following criteria:
Eligibility:
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Providing health care coverage. A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
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Firm size. A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
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Average annual wage. A qualifying employer must pay average annual wages below $50,000.
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Both taxable (for profit) and tax-exempt firms qualify.
Credit:
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Maximum Amount. The credit is worth up to 35 percent of a small business' premium costs (employer portion of premium only) in 2010.
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Phase-out. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers and ends in 2013.
View a quick example calculation by clicking here.
More information regarding this credit may be obtained from the IRS by clicking here
Child Only Policies No Longer Available
Effective September 23, 2010, the AAPCA (Health Care Reform) provided that child only policies would no longer be subject to pre-existing exclusions or denial of coverage.
In response to these mandated benefits, insurers have decided to stop offering child-only policies. In the past, many parents chose to purchase their child an individual policy as it was less expensive than adding the child to their employer-based health plan.
Aetna, Anthem and Medical Mutual no longer offer child-only policies, however all three carriers still offer family policies that cover children - as long as they can pass through medical underwriting and do not pose an adverse actuarial risk.
Change to Flexible Spending Accounts Effective January 1, 2011
Recent legislation has changed the rules pertaining to flexible spending accounts, beginning January 1, 2011. Notice 2010-59, Guidance on Changes to Rules for Reimbursement of Over-the-Counter Drug Expenses details these changes. Effective 1/1/2011, the FSA may only be used to pay for medicines or drugs only if one of the following exists: 1) requires a prescription or 2) is over-the-counter but a prescription for said item has been obtained from the treating physician, or is 3) insulin. The difficult part of using the OTC benefit, even under these guidelines, is that the receipt must provide the date/OTC item/price and the name of the person on the prescription.
It is anticipated that these changes will result in changes to the debit card system. The debit card may be used anywhere, for anything, and do not provide the substantiation that the item purchased is/was eligible under the FSA.
Cor-Ben offers Section 125 plans; flexible spending accounts (FSA), dependent care accounts (DCAP) and pre-tax premium arrangements. The administration is handled completely by Cor-Ben, and employees must submit receipts in order to be reimbursed by their FSA as the legality of the debit card based system has been in question.
COBRA Subsidy Not Extended
The 2010 Unemployment Extension bill was signed on July 22, 2010 by President Obama. This extends unemployment benefits for American workers that have still not located employment.
While the bill extended unemployment, it did not extend the COBRA subsidy. Employees terminated from employment on or after June 1, 2010 are not eligible for the subsidy, which reduced their COBRA payment to 35% of the regular rate.
Ohio's HB 1 Changes Adult Unmarried Children's Access to Coverage
The state of Ohio has stepped in to extend coverage to adult unmarried children up to the age of 28, regardless of student status. The state has been tracking an increase of unemployed adult dependents following college graduation and saw a need to provide coverage.
The first group medical insurance renewal on or after July 1, 2010 will provide this provision in compliance with the directives of HB1. The unmarried adult dependent may come on to the plan without a qualifying event at the open enrollment period associated with the group's plan renewal. Note that adult dependents will be subject to pre-existing exclusions for up to one year. If the adult dependent had prior coverage, then credit can be issued to waive the pre-existing exclusions.
The state of Ohio has further clarified that this bill applies only to medical coverage. Dental and vision plans are not affected by this change. The state anticipates that this will provide access to medical coverage for approximately 20,000 unmarried adult dependents.
HB 1 Mandates Pre-Tax Coverage Options
Employers with 10 or more employees must offer uninsured employees the opportunity to purchase coverage with pre-tax dollars. By allowing employees to contribute to their health care premiums with pre-tax deductions, they can reduce their tax liability. This will be phased in beginning January 1, 2011.
Cor-Ben Consultants is a licensed third party agency with the Ohio Department of Insurance. We are able to provide the plan documents and election forms that your company needs in order to comply with HB 1.
Please call us with any questions. We appreciate your business.
Managing Your Company's Healthcare Costs
In 2007, over half of insured Americans were taking prescription drugs to treat at least one chronic health problem, according to Medco, a leading pharmacy benefit manager. The good news is that people are receiving treatment which can help prevent problems down the road, however with a projected drug utilization increase of 2-3% this year and the same amount again in 2009 and 2010 pharmacy benefit insurance costs are expected to increase by a minimum of 4-6% during this year and continuing.
Treatment for high cholesterol and high blood pressure were the most commonly used medications for 15-20% of Americans. The top driver of increasing prescription drug costs however, is for treatment of diabetes. There is no doubt that rising rates of obesity among Americans are having a major impact on our health, and on rising insurance premium costs.
There are no easy answers in today's insurance market. Business owners need a broker that understands their company's demographics, budgetary requirements, and health history. Armed with this information, Cor-Ben Consultants then searches for a plan to fit your company's needs.
We offer products from the names you recognize-United Healthcare, Anthem Blue Cross, Medical Mutual of Ohio and Aetna. We are also an appointed broker for United Healthcare's new ERC program which reduces premiums when the employees participate in a health survey and create wellness goals.
Additionally, we offer Health Savings Account plans, and employer sponsored deductible reimbursement programs, Flexible Spending Accounts, and COBRA administration. We are your virtual HR benefits department, handling the day to day insurance needs of your employees, freeing up your time to work on what's important-your business. For a free, no obligation evaluation, call Gregg Mann at 614-326-7356 or 800-589.1418.
Need Individual Insurance? Anthem insurance quotes now available online, click here...
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How to Reduce Healthcare Costs- The cost of running a business in today's world is climbing. Higher fuel prices, competitive employee salaries, electricity-everything costs more. Many of those costs cannot be reduced.
However the cost of healthcare for your employees is a variable cost. You can make smart decisions to control those costs while still offering good benefits to your employees. At CorBen Consultants, we show you ways to reduce your bottom line health care costs without sacrificing benefits.
Have you explored the new HRA (Health Reimbursement Account) options? These plans have a higher deductible with lower premiums. You then fund a portion of the deductible for reimbursement to the employee. Most of our clients are realizing between 25% to 50% reduction in overall healthcare costs with this option.
Have you explored the HSA options? A health savings account offers lower premiums and employees then contribute funds to their HSA account to pay for those medical expenses after they are incurred. Unlike a Flexible Spending Account, the HSA plan is not "use it or lose it". The HSA remains with the employee for as long as they wish. Money saved in the account that is unused at retirement age can then be withdrawn for any expenses-not just medical ones.
We are able to provide a free competitive quote to your group to show how these options could reduce your costs. If you have a budgeted amount for healthcare, give us that budget amount and we will present you with options that fit your needs.
We offer more than just insurance. Our products and services are designed to meet the needs of the small business owner. To view our services, or to compare them to what you have now, click here.
You're #1 With Us
At Cor-Ben Consultants, our clients are the #1 priority. We specialize in service that goes far beyond comparing rates and benefits of group plans. Our dedication to service continues to make us one of the top 10 health insurance agencies in central Ohio.
Have you explored the options to save money while still offering good benefits? We offer plans to help you save. Call us today!
Small and medium sized companies want to compete with big companies for good employees. Benefit plans that include medical, dental and vision are a start. Life/AD&D, short & long term disability products that protect your employees' income are important, too. Our agency works with the top carriers in the nation. Names that your employees know, recognize and have confidence in.
Cor-Ben Consultants Inc. has been servicing employee benefit plans for over 30 years from our office in Columbus, Ohio. Experienced professionals combined with caring and conscientious people - the kind of people you can depend on. We are committed to a high standard of excellence in all that we do and to establishing a firm relationship of mutual trust and service with each of our clients.