Provide Affordable Health Care To Employees At Little To No Cost To You

You can provide affordable health care plans to your employees. If you feel overwhelmed by health care plan costs, you may be able to achieve far more than you believe. Here is how.

REAL NEEDS, REAL SOLUTIONS

Today, millions of EMPLOYED Americans depend on government aid, charitable organizations, and their own incomes to pay medical expenses. Until an extended illness or hospitalization occurs, these resources usually suffice.

When faced with catastrophic health expenses, people often turn to their employers. If your company provides insufficient insurance, will you pay someone who cannot work? To add insult to injury, this year Congress passed bankruptcy legislation that burdens millions of Americans in medically-induced financial crises.

Employers feel the pinch too. With every health insurance quote, numbers add up quickly: $150-250 per employee, $300-500 per family. Many businesses shift these costs to employees through higher deductibles and co-pays, partial premium payments, and other means.

And despite some television advertising, supplemental benefits are not well known in the workplace. Most providers rarely advertise or not at all. Supplemental health plans are separate from major medical and dental plans. A supplemental benefits broker brings you proven cost-reducing advantages.

The best supplemental benefits providers don't require employers to pay premiums. The employees pay for most benefits. However, competitively priced plans are inexpensive and pre-tax options can make them extremely attractive and affordable. Be sure you find a competitive provider with truly low-cost products to maximize savings and benefits.

Most insurance brokers do NOT handle supplemental benefits. When a supplemental benefits broker contacts you, assume your regular broker knows very little about such products. Ask questions. Make an informed decision. Most importantly, find ways to give your employees options and flexibility to care for their families. You cannot do it all, but they have to.

Good brokers schedule employee meetings to explain plans in detail. You should insist on a group meeting.

Plans fall into two categories: insurance and spending accounts. I'll describe them briefly, but you need to sit down with a knowledgeable broker to fully understand these programs.

SUPPLEMENTAL INSURANCE

Employers are usually asked to payroll deduct insurance premiums. Therefore, most voluntary plans may be offered as pre-tax deductions. Pre-taxing often reduces employee Federal and F.I.C.A. withholding. If employee F.I.C.A. contributions are reduced, employers who match contributions may save money, too.

Section 125 of the I.R.S. code defines the rules for pre-taxing voluntary benefit deductions. These plans are often called Section 125 or Cafeteria 125 plans. Pre-taxed plans restrict employees' changes.

Although some providers ask employers to guarantee premiums, competitive providers will NOT ask for employer contributions. Seek inexpensive insurance plans that incur no direct costs to employers. Accident care plans should cost no more than $15-25 per month: a dollar a day per employee. Family coverages and riders incur additional costs, so be informed.

Riders extend policy benefits. For example, an accident plan with a disability rider, a wellness rider, and a hospitalization rider provides considerable protection. If plans offer any reimbursement for preventive testing, employees may recoup some of their premiums.

The most popular insurance products are disability and accident plans. On average, about 50% of employees participate in them. Averages are not guarantees, but many employers are surprised by how popular these plans prove to be.

Cancer and critical illness plans are also popular. Employees may not want to pre-tax disability, cancer, or critical illness since benefits would be taxable. Some supplemental benefits providers have plans to help employees cover high deductibles and co-pays in major medical plans at reduced costs.

SPENDING ACCOUNTS

The several types of spending accounts are usually handled through third-party administrators. Because employees don't pay premiums, spending accounts are even more popular with some employers than insurance products. The neat thing about spending accounts is that they are pre-taxed, so both employer and employee may save money.

A Flexible Spending Account (FSA, or unreimbursed medical account) is used for co-pays, deductibles, over-the-counter expenses, and many items not covered by typical (or low-cost) major medical plans: crutches, hearing aids, etc.

Unfortunately, employers must pay small administrative fees for Flexible Spending Accounts. While they may recoup their expenses from reduced matching F.I.C.A contributions, some organizations don't make such contributions. Evaluate each FSA plan carefully to find the best match. With FSA plans, employees must budget carefully because they lose unspent funds at the end of the year.

Dependent Child Care Accounts are also popular. Some providers take a portion of reduced F.I.C.A. contributions as their fee. I.R.S. rules limit dependent child care expenses as tax deductions. Employees should understand two things: they will NOT claim these expenses on their tax returns AND their deductions become post-tax deductions after they have matched the current limit.

A new type of spending account is an HSA, or Health Savings Account. Unlike Flexible Spending Accounts, HSAs allow you to roll the unspent funds in the account over to the next plan year. So, what's the catch?

HSAs must be used in conjunction with High Deductible Health Plans. An HDHP costs less than typical major medical, but your deductible must meet a minimum requirement ($1000 individual, $2000 family). And you have to exhaust the funds in your HSA before you can use your insurance. So, HSAs are not for everyone. The U.S. Department of the Treasury has published a Web site with information on HSAs:

http://www.treas.gov/offices/public-affairs/hsa/

Work with a supplemental benefits broker to learn more about and understand how these programs help employers reduce costs, increase benefits, and assist employees in reducing their own medical expenses through effective, proven programs.

Michael Martinez is a licensed Life and Health insurance agent in the state of Texas. Insurance and benefits programs may be subject to both Federal and state regulations in your state. This article does not offer legal, tax, or financial advice. Consult a licensed supplemental benefits broker in your area to understand what choices you have available to you.

http://www.michael-martinez.com/

News provided by Yahoo! News and Google News

Tools And Tips For Small-Biz Spam Assassins - bMighty.com

Tools And Tips For Small-Biz Spam Assassins bMighty.com, NY - Dec 28, 2008 Building a Web 2.0 site is only half the battle. Keeping it free of spam and malware is the other half, and a new online tutorial on the subject serves up ...

Los Angeles-area small-business lender receives cash infusion (Los Angeles Times)
Valley Economic Development Center gets $15 million from the city of Los Angeles and $1 million from Merrill Lynch to bolster nearly drained loan funds. After nearly running out of money in its small-business loan funds last month, Valley Economic Development Center Inc. of Van Nuys says it is getting $16 million to enable it to continue to lend to Southern California firms caught in the ...

Wage Increase Will Hit Some Small Biz Hard - NBC4i.com

Wage Increase Will Hit Some Small Biz Hard NBC4i.com, OH - Dec 31, 2008 By Jason Mays Restaurants, such as Phillip’s Original Coney Island at 450 W. Broad St., will be hit hard by the increase. Owner Nick Manus said food prices ...

The Greater Tehachapi Chamber of Commerce recognizes Hilltop Publishers as the 2009 Small Business o (Tehachapi News)
The Greater Tehachapi Chamber of Commerce has selected Hilltop Publishers as the 2009 small business of the year for their continuous involvement and support of local charitable organizations and community volunteerism. Small in stature at less than five feet tall, publisher Claudia Henson is big on community service. It's difficult to attend community events and meetings without ...

Small Biz: New shop strives for global connection - Online Athens

Small Biz: New shop strives for global connection Online Athens, GA - Jan 3, 2009 Manager Tessa Anderson re-stocks shelves last week at the Earthbound Trading Co. in the Georgia Square Mall. A fairy statue sits on a shelf at the store. ...

Six small biz tips from a CEO who flies right - BloggingStocks

Six small biz tips from a CEO who flies right BloggingStocks - Jan 4, 2009 Boeing Co. (NYSE: BA) CEO, Jim McNerney, is managing a 159300 employee aircraft manufacturer with $66.4 billion in sales and $4 billion in profits (both ...

Kansas Small Business Development Center Launches New and Improved Online Resource Center at ... (Business Wire via Yahoo! Finance)
TOPEKA, Kan.----Today small business owners and entrepreneurs have easier access to the tools they need to start and grow a business – especially in these tough economic times. Kansas Small Business Development Center has launched its enhanced Web site at http://www.kansas.gov/ksbdc.

Daylite touch Demo-ing at Macworld Promises to Cure Big Business Mobility Envy for Small Business iPhone Users (Marketwire via Yahoo! Finance)
MACWORLD -- Small business iPhone users need not envy their big business smartphone counterparts. Marketcircle Inc. is lifting the Macworld curtain on Daylite touch, a new product that gives workgroups of up to 50 people the ability to embrace the iPhone or iPod touch as extensions to Daylite's productivity management paradigm.

Small-Business Owners Cut Spending, Jobs as Revenues Fall (Gallup)
The Wells Fargo/Gallup Small Business Index hit a new low in the fourth quarter of 2008, with many small-business owners saying they are generating less revenue, cutting capital spending, and eliminating jobs.

Small-business leaders, aerospace group give Colorado lawmakers their wish lists (BizJournals)
A group of small-business leaders on Monday asked Colorado lawmakers to avoid new regulations and to keep them “at the table” in the legislative session that begins in two days.