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.

Fear Not – Medical Insurance for Small Businesses Is Worth It!

Medical insurance - are there two more dreaded words that can be spoken to a small business owner? Small business medical insurance, however, offers numerous benefits and tax advantages that make it well worth the cost of premiums.

Medical insurance for employees of small businesses is a hot button issue. Approximately 45 million U.S. residents do not have medical insurance. Of those, about 20 million are employees, or a family member of an employee, of a business that has 50 or fewer employees. For companies that have more than 50 employees, more than 96% of workers have medical insurance. That number is only about 43% for small businesses.

What accounts for this phenomenon? You hear over and over again that employee medical insurance is one of the biggest expenses that a business owner faces. What exactly, though, are those expenses? The business owner is required to pay a percentage of the employee's individual premium. Typically this percentage ranges between 25% and 50%. If coverage is extended to the employee's family members, the employer cannot elect, but is not required, to also pay a percentage of those premiums.

In addition, small businesses typically must pay larger premiums than businesses with more than 50 employees. State requirements that certain conditions, treatments and providers be covered by the group health insurance policy is another reason that small business medical insurance can be costly.  

Small business medical insurance applies to businesses that employ between 2 to 50 people. Any permanent, compensated employee that works at least 25 hours per week is typically eligible to enroll in a small business health plan.  
 
Despite the costs, small business medical insurance has very real benefits. When you're able to offer health insurance to job applicants, you are guaranteed to have a more talented pool of candidates to choose from. As we're reminded of daily in the news, quality medical insurance is a major concern for Americans. 

Retention is another benefit of small business medical insurance. It costs you less to retain an employee than to seek out and train a new employee. If your employees are getting medical insurance from you, they won't jump ship to take a job with another employer simply to obtain medical insurance.

Last but absolutely not least, a healthy employee is a more productive employee. Having healthy employees, like the retention issue mentioned above, saves you money. When an employee is out on a paid sick day, you're shelling out the cash without getting any of the work. So although you're paying part of your employees' premiums, you're saving money in other areas by offering medical insurance.

Employer Group Health Plans – What Types Are There?

The most important thing most employers want to be able to offer to their employees is an employee benefit plan. Through these plans the employer can rest assured that his employees are well taken care. It also helps retain current employees since they are more likely to stay to keep the great benefits. Many people will take a lower paying job if the medical insurance plan is worth the lower pay.

Having affordable health coverage is one of the first things people ask about when they start a new job and for many, it can be the reason they accept a position with one company over another. Being able to offer comprehensive, and inexpensive, health care for your employees is a must have in the current economic situation.

Options Are The Key

For an employer group health plan to be truly effective and offer the most flexibility and option to your employees, having a number of plans to choose from is wise. Many health organizations will offer different types of medical insurance plans to fit the budget as well as the medical needs of a person or family. They are broken down into three normal categories:

Part-Time or Hourly Employees 
This type of plan is created to offer general and limited coverage options for essential services. They may also offer discounts on certain products or procedures. This type of medical insurance is good for non-salaried employees as they generally take less money out of each paycheck while still offering substantial services.

Full Time Employees
This plan is the more traditional or value focused plan for permanent employees who may or may not be on a salaried basis. They offer affordable, more comprehensive plans, which can be specially tailored to the employer’s desires. The benefits packages can be customized as well and flexible spending accounts are offered to help offset unexpected and costly medical procedures.

Low Cost – High Deductible Plans
This plan is designed for employees who are more engaged in their health care needs. They normally feature a lower cost per month with a higher deductible. Normally people who don’t go to the doctor often aside from normal check-ups prefer this type of plan. In this program, health care savings accounts are normally offered as a way to put money away in case an expensive procedure is needed.

There are also other options for employer group health plans, which may include any of the following and normally these options are added at additional expense to the employee:

* Prescriptions – Including pharmacy costs.
* Mental Health – Dealing with psychiatrists and other mental health institutions.
* Dental – This includes normal checks ups to dental surgery. They normally don’t cover much for cosmetic options.
* Vision – Normal checkups, discounts on glasses and contact lenses.
* Alternative Health Care – Such as chiropractic treatments.

Employers normally help offset the cost of health care by contributing a percentage of the cost for each employee so, finding an employer group health plan that is affordable as well as comprehensive is important. Employer health plans can mean the difference between retaining valuable employees and losing them to someone with better benefits.

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.

Advantages and Disadvantages of COBRA Alternatives

COBRA alternatives are necessary because the program costs more than most people can afford. This law exists to provide continued health coverage after an employee leaves a job. Coverage is only intended to be temporary. When a person is faced with the choice between purchasing private medical insurance and continuing with group health care insurance through COBRA, they must act quickly because they have a 60 day window to enroll in the COBRA plan. COBRA is the acronym that is short for the Consolidated Omnibus Budget Reconciliation Act. This law protects people by allowing the individuals that are eligible to continue their group health care plan for up to 18 months.

 

Eligible people have a limited time to make their decision about whether to proceed with the plan under COBRA or to instead choose a plan offered through an independent health insurance agent. After 60 days, the person is no longer eligible to use the benefits protected by COBRA.

 

Here are the advantages of using the COBRA plan:

 

·        Coverage is guaranteed for up to 18 months as long as premiums are paid on time without interruption. There is no guarantee that everyone can find coverage in the private sector. COBRA allows the covered person to continue the policy they had while working for their former employer without interruption. This removes any worry about spending time looking for an alternative to COBRA.

 

·        Group health plans usually have a lot of bells and whistles such as low deductibles, high dollar coverage, and a long list of providers and conditions that are covered. Sometimes it is difficult to find similar choices with private health insurance.

 

·        Pre-existing conditions are often excluded for at least 12 months on private health insurance plans. The length of time the exclusion continues depends entirely on the company. A person covered through their former employer’s group health insurance plan does not have to worry about pre-existing conditions, at least while the coverage continues.

 

Disadvantages of continuing with the plan through COBRA:

 

·        If a person misses a payment, coverage can be canceled. Once the policy is canceled, it cannot be reinstated. COBRA law requires the insurance company to send notices of nonpayment for cancellation; however, it is easy for a person to miss the notice, leading to an increased likelihood that the policy will be canceled.

 

·        Premiums on a group health care plan are very high in comparison to private plans. The law requires that the covered person pays 100% plus a 2% penalty of all premiums. People often find that their premiums through COBRA are up to three times higher than private health insurance plans.

 

·        COBRA is a temporary fix to a health insurance problem. The very fact that coverage is temporary can be a problem if the covered person finds a job that does not offer healthcare benefits.

 

Experts recommend that people find an alternative to COBRA as soon as possible to save money and to obtain a policy that is not temporary.

Rising Unemployment Rate - Looking for COBRA Alternatives

With unemployment possibly reaching as high as 9% in the next year, BestHealthcareRates.com is fielding a record number of questions about COBRA alternatives for family health insurance plans. Contrary to popular misconceptions, COBRA is not a health insurance plan; rather, it is a law named the Consolidated Omnibus Budget Reconciliation Act. COBRA protects employees in the event they lose their employer-sponsored health benefits. Qualified employees may keep the dental and medical insurance they had under their employer for 18 months. However, because the former employee carries the entire cost of the insurance policy – up to 102% of the original premium, the cost of maintaining insurance can be prohibitive.

Uncertain economic times are driving already financially-stressed employees to seek a more affordable COBRA alternative. BestHealthcareRates.com offers more affordable family health insurance plans than what the employer based plan would provide. By doing health insurance comparisons, one can get similar, lower cost benefits by taking a COBRA alternative. Often, the former employee is not at all aware of their options and they needlessly stay with a higher cost plan. Once they see the benefits of a COBRA alternative, they opt out of their former plan. Dental and medical insurance can be found in these COBRA alternatives too. Without a COBRA alternative, the unemployed may be paying much more than they need to at a time they can least afford it.

“If you have a disability, you may need to opt for your employer’s coverage but can still get a COBRA alternative for the rest of your family,” said Tom Carolan, Director of Client Services with BestHealthcareRates.com. “Again, by making a health insurance comparison, you will see the great potential savings that exist for your family even if you, as an individual, remain on the employer plan. A cost-cutting COBRA alternative is essential for many households even if the coverage is for the rest of the family.”