Medical Insurance Blog

New Tax Credits For Small Employers Providing Medical Insurance

Medical Insurance coverage legislation enacted this year includes a Small Business Health Care Tax Credit to help small businesses and small tax-exempt organizations afford the cost of covering their workers.

Small businesses and tax-exempt organizations that provide health insurance coverage for employees may now qualify for a special tax credit, according to the Internal Revenue Service (IR-2010-38, April 1, 2010).

The maximum small business tax credits are:

• Eligible small businesses - The maximum credit is 35% of premiums paid in 2010
• Eligible tax-exempt organizations - The maximum is 25% of premiums paid.

These maximum credits are scheduled to increase in 2014

Eligible small businesses can claim the credit as part of the general business credit starting with the 2010 income tax return they file in 2011 (the IRS will provide information for tax exempt organizations later).

Click Here For Three Simple Steps for Employers to Qualify For

The Small Business Health Insurance Tax Credits

 

Group Medical Insurance Keeps Employees Happy, Improves Business

Businesses struggling in the current economic climate are seeking new ways to improve the bottom line, and group medical insurance is proving to be a beneficial tool for creating better business. From tax incentives to employee retention, offering group health insurance to employees can provide a win-win situation for both employer and employee.

Also known as an employer-sponsored health plan, group medical insurance is on the chopping block for many businesses that are trying to cut costs and keep their companies afloat. Because most Americans receives family health insurance coverage through an employer-sponsored group plan, the elimination of these health plans could result in major financial struggles for working Americans.

However, business owners who chose to keep a group medical insurance plan as part of their employee benefits package are discovering that it improves not only employee moral but also the bottom line. They are more likely to attract the best workers and are able to decrease employee turnover rates. As for improving business finances, group medical insurance plans pave the way for tax incentives.

Business owners who contribute to employee premiums or share costs with employees, can typically deduct 100% of premiums paid. In addition, it is possible to reduce payroll taxes when the medical insurance coverage is part of a total compensation package.

"Having quality employees is vital to a good business, and providing group medical insurance is vital to obtaining and maintaining quality employees. Even if the business budget is tight, it is still possible to find an affordable medical insurance package that keeps employees happy, protected and performing well to benefit your business.

Is Group Medical Insurance Affordable Health Coverage?

Everyone wants to save some money and find affordable health coverage. If you are choosing between group health insurance coverage and individual medical coverage, most people assume group healthcare will be the most affordable option. Many people are offered group health insurance either through their place of employment or through their spouse’s employment. In fact, for some families, the type of medical insurance offered by a company is as important to consider as wages.

You can also find group health insurance coverage through other outlets such as professional associations, student organizations and professional and civic groups. Some groups will provide group health insurance as an incentive for people to join.  

Is it true that group health insurance is always the most affordable type of insurance? Surprisingly, no it isn’t always the best answer. With group health insurance, everyone in the group is generally accepted into the plan with no penalty for pre-existing conditions. While this can be very beneficial for those who have a health condition which makes them high risk, it’s important to know that cost is distributed among the other members of the group. Because of the guaranteed acceptance in a group policy, the premium rates may be quite high. Many times, however, employers will pay a portion of the medical insurance premium, therefore reducing the amount owed by the individual employees. Rather than blindly assuming a group health rate is more affordable medical coverage than an individual policy, you need to examine carefully how much your portion of the premium is for both individual coverage and family medical insurance coverage. 

Group medical insurance will also limit you to one or possibly two providers in many cases. If you choose an individual healthcare policy, you can often choose your provider from a much larger network of doctors, hospitals and clinics. You also have the choice of many different insurance companies when you purchase an individual policy, further expanding your provider options. 

Your care options on a group health insurance plan may be more limited with a group plan as well. With individual health coverage, you can choose things like dental, vision, chiropractic care, etc, that you probably will not have any control over in a group plan. 

Finally, group healthcare will often provide only one option for deductibles and copays. When you purchase individual healthcare, you make the decisions regarding deductibles and copays, which can lower your premium significantly. 

Group health insurance does offer a significant benefit over many individual healthcare policies. By joining a group health insurance policy at your place of work, you will not need to pass a physical exam by a doctor to be accepted. Group health plans will also generally accept pre-existing conditions, which can be much more difficult with an individual policy.  

Group health insurance policies can vary widely from state to state, as well as from company to company. Never make a blind decision when choosing your healthcare policy. You must compare provider options, coverage options, deductible costs, co-pay amounts and premium costs in order to choose the best, most affordable health coverage for your needs. 

Downsized Employees Consider Dropping health insurance Plans Unnecessarily

Facing severely decreased household income after a job loss, unemployed workers risk further financial distress by dropping their health insurance. Health insurance experts warn against making this budget cut, explaining that good medical insurance protects a family, especially if major illness or injury occurs. Struggling families can find affordable health coverage that offer excellent coverage.

Finding the best health insurance plans is a process. The initial step is to learn about the options that are out there for affordable medical plans. By taking the time to investigate how plans are different, by doing a health insurance comparison, consumers can learn which one best fits their needs. Sometimes by giving up certain control over healthcare choices, they can save money on premiums and overall healthcare costs. An HMO is a good example. There is typically a restriction on which doctors and facilities the insured can use, but the deductibles and co-pays on this type of policy are much lower than other policies like PPOs. This means that often-healthcare costs are lower overall in the long run – especially for families that make frequent visits to the doctor.

For many people, a more basic medical insurance plan is sufficient. In many cases, a comprehensive insurance plan represents spending more money for little true added benefit. Experts also recommend cutting dental and vision coverage if they are not absolutely necessary. Raising the deductible can be a sound move, providing the insured has a cash reserve. Higher coinsurance percentages will also mean taking on more of the risk, therefore premiums will be lower.

“Finding affordable family health insurance, even in a tight economy, can definitely be done. It does however; require shopping around and comparing quotes, as well as time researching policies prior to getting a quote and researching companies after the quote,” said Tom Carolan, Director of Client Services with BestHealthcareRates.com. “With knowledge and competitive quotes on your side, you can be sure of finding an affordable medical insurance policy that perfectly fits your needs.”

Employee Benefit Plans – Highest Cancellation Rate In Two Decades!

 

On the accessibility of affordable medical insurance coverage, Dan Danner, the CEO and president of the NFIB, stated his thoughts on the importance of this matter: “We must work together to pursue creative, private market solutions to what has become an unsustainable problem for small businesses – increasing small group health insurance costs.” He continued by adding, “It is imperative that insurance market reform – specifically in the individual health and small group health insurance markets – leads to greater access to larger pools, increased portability and competitive choices.”  

 

The AHIP conducted a nationwide tour of the United States to get opinions and stories directly from the American people in regards to their experiences with health care institutions. The people with whom they talked to were also asked for their ideas for health care reform. During their conference the AHIIP released their findings to the joint committee.

In 2008:

·        Small group health insurance premiums averaged $913 per month for family medical plans and $346 for individual medical coverage.

·        Health insurance premiums ranged from as low as $198 a month in Washington to $504 a month in Alaska.

·        Companies with more employees generally paid less than companies with fewer employees.

·        Forty-one percent of businesses had an HMO plan, 50% had a PPO and only 7% were enrolled in heath savings plans in 2008.

 

AHIP released a statement highlighting the specific needs and obstacles faced by small businesses, calling policymakers’ attention to difficulties faced by small businesses. The organization recently launched the “Campaign for an American Solution”, a new national grassroots and educational initiative to build support for workable health care reform based on core principles shared by the American people: coverage, affordability, quality, value, choice and portability.

 

In a letter to key Senators last week, AHIP and the Blue Cross and Blue Shield Association offered to curb its practice of charging higher premiums to people with a history of medical problems. The offer from AHIP and the Blue Cross and Blue Shield Association is a potentially significant shift in the debate over overhauling the nation’s health care system to rein in costs and cover an estimated 48 million uninsured people. In the letter, the two insurance industry groups said their members are willing to “phase out the practice of varying premiums based on health status in the individual and family health insurance markets” if all Americans are required to get health insurance coverage.

  

“The offer here is to transition away from risk rating, which is one of the things that makes life hell for real people,” said health economist Len Nichols of the New America Foundation public policy center. “They have never in their history offered to give up risk rating.”  

 

“This letter demonstrates that insurance companies are open to major insurance reform and are even willing to accept broad consumer protections,” said Sen. Jeff Bingaman, D-N.M., a moderate who could help bridge differences on a health care overhaul. “It represents a major shift from where the industry was in the 1990s during the last major health care debate.”

 

AHIP has published its proposal for health care reform to make medical insurance affordable, and they state: The U.S. could reduce total health care spending and improve the quality of patient care if the plan proposed today by America’s Health Insurance Plans (AHIP) was implemented. PricewaterhouseCoopers reviewed AHIP’s proposals and estimates, and concluded that if these proposals are fully implemented, the nation’s total health care expenditures could be $145 billion lower than currently projected by the year 2015.

“Insurance companies offering individual medical coverage cannot hire and train new employees fast enough to keep up with the recent spike in private health insurance enrollments”, said Tom Carolan, Director of Client Services for BestHealthcareRates.com, a health insurance information website based in Arroyo Grande, California. Carolan continued, “the plight of the individual medical coverage market is the focus of much media attention, but it is vitally important to economic recovery that small businesses get help”. 

Affordable Health Coverage For Your Small Business – What’s Going On?

Among all the groups possible, small business is one of the hardest hit in the current economic situation and the most vulnerable when it comes to finding affordable medical insurance coverage for their employees. Despite the many things we hear every day about the economy and health care reform, many small businesses do want to provide their people with coverage.

 

When a small business is looking for affordable group health plans there are a few things they know to look for in their prospects:

• Low Premiums – The less they have to pay for it the better.
• Affordable Medical Coverage Options – The more options the better.
• Flexibility – Giving the employees choices between different types of affordable coverage plans to fit their particular needs and budget. 
• Consistency – Fees that don’t increase at any time.

One of the biggest complaints from most small businesses is the fear their rates will go up at any time and without any real warning. Because of the continual rising cost of medical treatment, finding consistently affordable health care coverage is becoming harder and harder to manage. Changing plans year to year, to find lower rates, is not an option for many of the owners.

When asked, a large percentage, almost 75%, of small business owners said they are more than willing to help offset the monthly premium costs for their employees. Some employers even stated they would be willing to raise their employee’s payroll by 4 to 7 percent to help with the rising costs of health care coverage.

The Government’s Role

Many small business owners, 75% of them, do support the government taking a bigger role in the reform of the health care system. Citing specific needs for more oversight and regulation of the medical industry as well as the health insurance industry to ensure access to quality and affordable health coverage for everyone.

There is also a call going out for a quality public alternative to private health care coverage. Because small business is so very vital to the survival of the economy, their cries and calls for change are being heard more now then ever before. Small business owners want affordable health care coverage, they are willing to contribute to make it happen and they want it now.

Small Business – The Lifeblood of the Nation

Small business plays a paramount role in the life of the nation’s economy by providing jobs and creating income. A number of factors are combining now to make the survival of these businesses harder and harder each and every day. The grim fact is simple, without some change or options made available to them; the future is bleak for small business owners.

Caught between a rock and a hard place is a good way to sum of the current plight of small businesses. Between the recession and rising health care costs, the small business owner is being squeezed out of existence. This is why it is so important to ensure the availability of affordable group health care plans for all small business owners.

Small businesses deserve affordable health coverage for the hard working employees they employ and themselves because everyone has a right to quality health care.

COBRA Alternatives Save Money

Most people have no idea what COBRA means. Congress enacted the Consolidated Omnibus Budget Reconciliation Act or COBRA to protect people in the event that they face the loss of health insurance coverage when changing jobs, after the death of the eligible employee, after divorce, or some other life altering event. COBRA is not health insurance. It is simply a law.

 

Once a person becomes eligible under COBRA, they have 60 days to make a decision about whether they want to continue coverage or not. If they decide they want coverage, COBRA allows them to continue coverage under their former employer group health insurance plan for up to 18 months. Premiums can be as much as three times the amount they paid while employed because the former employee is now responsible for 102% of the premium cost. Most of the time, it is prohibitively expensive. Maybe that’s why only 20% of eligible people elect to continue their health insurance benefits.

 

Fortunately, there are alternatives that can save people money. Health insurance agents have many different options they can present to people seeking health insurance. They are licensed professionals who are educated and experienced in dealing with healthcare insurance questions on a daily basis.

 

Here are just a few options that are available:

 

·        Aetna is one of the largest insurance companies in the United States. They offer health insurance coverage in many different states. Aetna has group plans customized for the differing needs of the employers that buy group health insurance through the company. The cost and plans vary significantly depending on individual state laws and business needs. Aetna does business in the private sector as well.

 

·        Blue Cross and Blue Shield are two names that are widely recognized around the United States. They offer health insurance to both companies and individuals. Because they are nonprofit companies, the rates are usually much more competitive than those offered by other companies.

 

·        Short-term health insurance can be a very viable alternative for those who are in between jobs. Often, people are without insurance for only a brief period of time. Once they get a new job, they will be eligible to enroll in the group health care plan offered by their new employer. Short-term health care insurance is sold by many different companies and can be purchased by individuals through an independent health insurance agent. Coverage on these plans is usually very affordable, but does have its limititations.

 

Obviously, people need to seek the services of a professional licensed health insurance agent that does business in their state. They can provide free quotes and valuable information to help people make the right health care decisions relevant to their own unique situations.

Understanding COBRA Problems and Cobra Alternatives

People who have lost their jobs for any reason may be concerned about finding COBRA alternatives. The COBRA legislation was set up by Congress to provide protection for people who have health insurance provided by their employers. The Consolidated Omnibus Budget Reconciliation Act or COBRA was created to give people the option of continuing with insurance through the employer’s group plan for up to 18 months after termination of employment. In other words, if you lose your job for any reason you can elect to pay to keep the same insurance for up to 18 months.

 

It all sounds good in theory but there are a few concerns people face when considering using COBRA:

 

·        COBRA is expensive. People have to pay about $600-$800 for individual health insurance through this plan. Families can expect a bill of at least $1300. Most people are unpleasantly surprised by the high dollar amount they are expected to pay for continuation of their health care coverage.

 

·        Why is COBRA so expensive? While the person is working, the employer likely paid the majority of the health insurance premium. That was part of the employee benefits package. Once someone no longer works for the employer, the premium burden falls to the former employee because the employer is not required to pay for health insurance benefits for people who do not work for them.

 

·        Unemployment compensation does not pay enough to cover COBRA. Affordability is important for people who have been laid off or lost their jobs. Affording a high health insurance premium is difficult for someone who lives on unemployment compensation. Most people who use their unemployment benefits only receive a maximum of $1300 each month. It does not make sense to spend almost all of that money to provide health insurance rather than food or living expenses.

 

·        The government allows 60 days for someone to make the decision about whether or not to choose COBRA benefits or the alternative. Any person who has recently lost a job may not feel emotionally prepared to deal with finding affordable health coverage. Getting a health insurance comparison from a qualified insurance agent will equip a person to make a judgment about healthcare options.

 

The need for family medical insurance does not end when the job does. Changing jobs causes a lot of stress. Living without a job creates higher stress levels. High insurance premiums cause even more stress. Fortunately, COBRA alternatives do exist that can save money. A qualified private health insurance agent is the best person to consult for questions about health insurance.

Some Questions People Should Ask about COBRA and COBRA Alternatives

Understanding all of the provisions related to COBRA is daunting even to some professionals and so is information about COBRA alternatives. There are important deadlines that must be met if a person plans on continuing their health insurance after becoming eligible for benefits under COBRA. Most people realize they have more questions after they have had their meeting with the human resources department or received their written notification of COBRA benefits in the mail. It is imperative that people take action to get the answers they need so that they can make an informed decision about whether to continue with their employer-sponsored benefits or to choose a COBRA alternative. Here are some questions that are common:

 

What is COBRA? Most people don’t even know what COBRA is much less have an understanding about how to sign up for benefits. In short, COBRA is the acronym for a law enacted by Congress in the late 80s. It was set up to protect employees from losing health insurance coverage when there is a death of the sponsoring employee, a divorce, a job separation whether voluntary or involuntary, or a reduction in qualified hours for retaining health insurance coverage. COBRA is not health insurance.

 

What is a COBRA alternative? Any private health insurance can be an alternative to COBRA. Policies are available for purchase from licensed health insurance agents. Private health insurance policies are contacts made between the person covered and the insurance company, not the employer.

 

How long do benefits under COBRA provisions last? People can continue their employer-sponsored benefits for up to 18 months. This can be extended for a total coverage of up to 36 months if the person meets eligibility requirements such as disability.

 

How long do benefits under a COBRA alternative last? As long as premiums are paid, private health insurance policies last until the policy is canceled for nonpayment or the covered person chooses to cancel the policy.

 

How much will it cost for benefits under COBRA provisions? This is a question that can only be answered by the benefits administrator in the human resources department of the former employer. People who choose to enroll in coverage continuation under COBRA provisions must pay for 100% of all insurance premiums plus a 2% surcharge each month.

 

How much will a COBRA alternative policy cost? People can get free quotes from a licensed health insurance agent. Premium costs vary by the type of policy and the state where the individual lives. Rates are also affected by health and age.

 

These are just a few of the many questions people may have about health insurance coverage related to COBRA and COBRA alternatives. People should contact the benefits administrator at their former employer for questions about COBRA. Questions about COBRA alternatives should be directed to a qualified health insurance agent.

COBRA Alternatives—Five Mistakes People Make

There are COBRA alternatives.  People often do not understand their options for health insurance coverage. When anyone faces a job loss, divorce, reduction in work hours, or death of a covered sponsoring employee, they may be eligible for extended coverage for up to 18 months under COBRA.  COBRA is the Consolidated Omnibus Budget Reconciliation Act adopted by Congress to ensure that eligible people can continue to have access to their employer sponsored health care plan.

Health insurance is complicated. That is why insurance agents must study to pass a complicated exam before they can become licensed to sell it. Most people never read their insurance policies and do not listen or in some cases misunderstand when their employers explain about their rights under COBRA. They make many mistakes that can be very costly:

• People do not ask questions when they do not understand some detail about their rights under COBRA. They may feel embarrassed or intimidated. No matter how stressful it may seem, understanding their rights is a high priority. Everyone should ask as many questions as they need in order to make an informed decision about health insurance.
• People assume their former employer continues to pay for health insurance. Nothing could be further from the truth. Anyone who participates in health insurance under COBRA pays 100% plus a penalty.
• People often think they do not need health insurance. The reasons vary. Younger people think that since they are healthy, health insurance is an unnecessary expense. Others think they will find a job quickly. Not all employers provide health care coverage and these days, new jobs are hard to find. The lesson here is that young people do get sick, and it is a mistake to assume all employers will provide health insurance.
• People do not seek the help of an insurance professional. Paying for benefits under COBRA is expensive. Insurance agents have a number of options to fit the differing needs of individuals and families. They can do a health insurance comparison that will contrast the benefits and costs to the person.
• People think everyone qualifies for benefits under COBRA. That is not the case. The law specifies the eligibilities. If an employer drops health care benefits, employees are not entitled to any protection under COBRA. This mistake goes back to assumptions. People should never make assumptions, but instead they should ask questions to find out if they are qualified.
• Many believe that COBRA is medical insurance. It is not. COBRA is an acronym that is short for the Consolidated Omnibus Budget Reconciliation Act. It is a law enacted to help people continue employer sponsored health insurance for a short period of time.

Health insurance agents work on behalf of the person buying insurance. They can offer consultations that help people understand all of their options in relation to health care coverage. They often have access to Blue Cross/Blue Shield, Aetna health insurance plans, and plans offered by other companies.