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Five Health Care Options for Small Businesses

Bookmark and Share Some large companies offer great perks like paid gym memberships, flexible scheduling or company stock. You may not receive these perks as a small business employee, but you could be eligible for valuable health insurance. As many as 54 percent of small business owners choose not to offer health insurance because of the cost, though. Share information with your employer about five health care options for small businesses that help you get the insurance coverage you need.

  1. Private Small Group Plan

    Some insurance companies offer private small group insurance plans. The insurance company assesses the small business's employees to determine risk, and then they create a plan that outlines the benefits they'll offer and the premium cost per employee. This option gives small businesses greater opportunities to shop around as they find the best coverage and rates for their employees.

  2. SHOP Marketplace

    Small businesses with fewer than 50 employees may purchase insurance through the SHOP Marketplace. It's operated by public federal or state exchanges although some states offer limited SHOP Marketplace options. Registered SHOP Marketplace brokers assist business owners in selecting and setting up the right plan for them. Small businesses receive tax credit for enrolling, but they are required to meet requirements, including premium contributions or enrollment percentages.

  3. Private Exchange

    A small business can contribute a set amount to each employee who purchases insurance through a private exchange. Employees may choose from several plan options. A broker works with employees to help them find and select the right coverage for their needs.

  4. Co-operative

    Co-operatives are a traditional way for small businesses to offer health insurance to their employees. Several businesses can work together to negotiate rates and benefits while lowering administrative and management costs. Employee participation is optional. Because each co-op is structured differently, some may offer better rates than other health care options for small businesses.

  5. Individual Health Insurance

    Small businesses may choose not to offer health insurance. In this case, choose the insurance you want when you buy individual health insurance. Talk to a broker or purchase a policy through the Marketplace, and select the insurance company, coverage and deductible you want. Some employers will give employees a defined contribution allowance that reimburses a portion of the premium cost. They choose how much to contribute as long as it's within federal limits.
As a small business employee, your employer may not offer the health insurance you need. Share these health care options for small businesses and ask your employer to choose an option that fits your needs.  If you do already receive health insurance, compare other options to ensure you're getting best rate and the right coverage.
 

Keep Your Eye on the Prize

Bookmark and Share Planning for retirement can sometimes feel like studying rocket science, but it doesn’t have to be so complicated. Throughout the last decade, economists and financial pundits have come up with “target numbers” to be used as waypoints and objectives for upcoming retirees. At times, individuals have placed too much weight on these experts’ advice.

The financial landscape of America is changing constantly and retirement planning must evolve with it. Outdated advice and rigid financial guidelines will not prepare the millions of Baby Boomers who are nearing retirement age. Take a closer look at some of these antiquated suggestions retirement experts have been known to give and see why it no longer makes sense to aim for these “target numbers.”

Target Number - 70%
What does it mean? Individuals should plan on spending about 70% of what they currently make during their retirement years. For instance, a person who made a $100,000 salary during their working years should plan on spending $70,000 per year after retiring.

Why this is wrong: Life expectancy is on the rise, with the average person living past their 78th birthday. Retirees with pension plans don’t have much to worry about, but people with personally financed retirement funds, like 401(k)s and IRA accounts, run the risk of out-living their nest egg. Certainly retirement is a time of relaxation and enjoyment, so properly budgeting your finances is a must if you want to keep the party going well into your golden years. Do you have a medical condition that may require long-term care in the future? Or have your relatives lived exceptionally long lives? Take into account these and other relevant factors when determining your investment and post-retirement spending strategies.
Target Number - 4%
What does it mean? When considering the total amount a retiree has saved, individuals should spend 4% of that total each year during retirement, while keeping the remaining balance properly invested in stocks and bonds.

Why this is wrong: As the market rises and falls, one’s spending habits must do the same. Continuing to spend 4% while your portfolio is having a down year will quickly dry up your assets, while you might find yourself under-spending during times of high returns.
Target Number - 62
What does it mean? At the age of 62, individuals can begin to receive reduced Social Security benefits. The Census Bureau also reports that 62 is that average age of retirement in the U.S.

Why this is wrong: Reduced Social Security benefits may not supply the income necessary to retire on, with maximum available benefits coming at 70 years of age. Working a few extra years past 62 can also give you the income necessary to beef up your 401(k) plan or IRA.
Target Number - $1 Million
What does it mean? This is the target amount you should have saved before retiring.

Why this is wrong: Some economists are actually now saying that $1 million might not be enough to comfortably retire on. When Scottrade analysts where asked if $1 million were enough money for the average American family, more than 70% of them responded “no,” further explaining that $2 million - $3 million is now the target amount. Unfortunately, these numbers don’t agree with most Americans’ pocketbooks.
A recent study of individuals with self-managed retirement plans by the Employee Benefit Research Institute found that workers ages 55 to 64 were saving less than $70,000, much less than what Scottrade analysts feel is ideal.

Although these two numbers may not mesh, Americans always find a way to make do with what they have saved. Eliminating debt and avoiding unnecessary spending splurges is the best way to stretch your dollars while heading into retirement. Of course, keeping a close eye on your savings and maintaining a balanced portfolio always helps, too.
 

Eight Potential Updates on the Health Care Act

Bookmark and Share In March, Republicans in the United States House announced updates designed to strengthen the American Health Care Act (AHCA). The AHCA replaces the Affordable Care Act or Obamacare and will give all Americans access to the healthcare they want and deserve. While the AHCA is not law yet, several updates are important for you to understand since it can potentially affect the health care you receive.
  1. Makes Insurance More Affordable

    Premiums are expected to decrease under the AHCA. Limits will also be placed on deductibles and out-of-pocket maximums while annual and lifetime limits on essential health benefits are removed. These actions make insurance more affordable to individuals.

  2. Increases Insurance Accessibility

    Several potential health care updates could improve insurance accessibility for all Americans. These updates include:

    • Guaranteed issue regardless of pre-existing conditions.
    • Advanceable tax credit for low and middle class individuals and families.
    • Increase in tax credits for Americans between 50 and 64 years of age.
    • Financial support for certain Americans with high health care costs.
    • Reduction in the allowable tax deduction for medical expenses from 10 percent of income to 5.8 percent.

  3. Removes Individual Insurance Mandate

    Under Obamacare, every American must purchase insurance. The Updates on the Health Care Act remove this mandate. It also would repeal the Obamacare tax starting in 2017, allowing anyone who paid the tax to receive a refund.

  4. Removes Employee Mandate

    Many employers must provide insurance coverage for full-time employees. This mandate is removed with the Health Care Act updates. Employers could still cap health FSA contributions as they increase HSA contributions.

  5. Promotes Flexibility for State Medicaid Programs

    Each state boasts a unique population, and governors want flexibility in meeting their citizens' needs. The Medicaid updates on the health care act establish a Patient and State Stability Fund that allows states to customize programs for their unique populations. It gives states power to:

    • Opt out of the per capita allotment baseline and choose a block grant from the federal government.
    • Create optional work requirements for healthy adults.
    • Reevaluate their need and preference every 10 years.

  6. Freezes Medicaid Expansion

    New states will not be allowed to opt into Obamacare's Medicaid expansion, but beneficiaries who are enrolled before December, 31, 2019 may be grandfathered into the expansion. Enrollees will be removed from the program as their income and other circumstances change.

  7. Increases Reimbursement to Certain Medicaid Enrollees

    Elderly and disabled Medicaid enrollees will receive an annual raise based on inflation. This update ensures the most vulnerable Medicaid recipients receive the health care they need.
If you have an opinion on the AHCA or updates on the health care act, contact your U.S. representative or senator today. Your voice matters as you get the health care you want and deserve.
 

Avoid Common Mistakes in Employee Benefit Administration

Bookmark and Share Once annual enrollment has come and gone, it’s a good time to brush up on some basic benefit plan requirements, to avoid some of the common mistakes made in employee benefit plan administration. The following list of potential errors is by no means exhaustive, but represents a sampling of issues to steer clear of:

Keep your plan documents up to date and reference them in related plan communications.

ERISA requires that all employee benefit plans be maintained pursuant to a written plan document. As the governing document for the plan, it should be reviewed regularly, and amended if necessary, to keep up with new laws and regulations (such as health care reform). Since this will be the most detailed document regarding any given plan, it should be referenced in disclaimer materials included in less formal plan communications (such as annual enrollment materials) as the document that will control in the event of discrepancies, or errors or omissions in these other ancillary communications.

Keep summary plan descriptions (SPDs) up to date and distribute them to employees.

ERISA requires that employees receive an SPD covering each benefit plan, and specifies the information that must be included in the SPD. Plan vendors might supply booklets or other communications materials to distribute to employees that describe the plan, but these are unlikely to meet the requirements for an SPD. When plan changes result in an SPD needing modification, an employer might distribute a summary of material modifications in the interim before preparing an updated SPD.

Include only eligible employees (and dependents) in your plans, as to do otherwise will run contrary to plan documents and represent unnecessary coverage costs for your company.

Improperly covering ineligible individuals -- contractors, leased employees, former employees, etc. -- can be a costly proposition. Similarly, maintaining formerly eligible dependents who, for example, have aged out of the plan, unnecessarily adds to plan costs. Eligibility audits can help to mitigate this problem.

Follow plan terms in administrative practices.

The plan document governs, and both internal staff and outside administrators must follow the terms of the plan when making eligibility and claims decisions, issuing plan notices, handling appeals, etc.

Make sure plan contributions are calculated properly.

This includes taking into account the definition of compensation that is in the plan (which might include bonuses, commissions, etc.) and calculating matching and profit sharing contributions correctly.

If you allow employees to pay for any benefits on a pretax basis, a cafeteria plan is required.

Although the term “cafeteria plan” might conjure images of employees selecting from a menu of benefit choices, a cafeteria plan is, at its most basic level, a premium only plan, and is required to be adopted before employees can pay their health (or dental, vision, etc.) plan premiums with before-tax dollars, or to make before-tax contributions to a health care or dependent care flexible spending account.

If employees make salary deferrals to a 401(k) plan, these deferrals must be deposited into the plan trust on a timely basis, as by DOL regulation they become plan assets as soon as they can be reasonably segregated from the employer’s general assets.

Review your COBRA administrative practices to make sure all individuals qualified to elect COBRA coverage receive the proper notices, for all plans subject to COBRA (the health plan, but also the dental and vision plan, and the health care flexible spending account).

Administrative errors can result in fines and penalties, lawsuits, and employee discontent. An annual plan self-review can avoid these potential costly consequences of common mistakes.