Health Care Tax Credit for Small Employers
Many small businesses and tax-exempt organizations that provide health insurance coverage to their employees now qualify for a special tax credit under the Obama health reform legislation that just passed. This credit is designed to encourage small employers to offer health coverage for the first time or maintain coverage they already have. If you pay at least half the cost of the health insurance (employee only) you might be entitled to a 35 percent credit of those premiums. This credit is effective now (2010). The credit increases to 50 percent in 2014. The IRS has all the information on how to apply for the credit on your 2010 tax return. This is a great opportunity to use your health plan to recruit and retain the best people for your positions. You can structure multiple plan designs and with the credit pay an affordable amount for coverage. Contact me for more info. alan@cgbins.com.
Coverage For Dependent Children
The Obama Health initiative makes provisions for dependent children to age 26. Currently issues come up as to what age carriers will cover these children. When they say to 23, is that through their 23rd year to their 24th birthday? All carriers provide you with a summary of benefits and that issue should be addressed in those documents. The new plan gives insurers six months to include this coverage. I have heard that the wording in the bill allows this to be delayed to 2014. Whatever the case it is prudent to check with your broker and the insurance carrier to find out exactly when your dependent child remains covered.
Use employee benefits to your advantage
I have been selling employee benefits to employers across the US for over 12 years. It still amazes me that many of my clients and most employers think of the benefits as an EXPENSE for their company. Developing a benefits package to offer to your employees actually can enhance the quality of your labor force. If you use the benefits properly it can be an amazing recruiting and retention tool. I have shown employers how to offer a package that includes health insurance, dental, vision, long term and short term disability and life insurance. Incorporating all of these coverages and picking up the ENTIRE cost can not only save you thousands of dollars on what you currently have but going will enable you to be compliant to any current or future government regulation. An employer also has to make the employee more aware of the cost of the benefit. An annual statement of these costs in addition to the W-2 that is sent annually really provides the employee with an insight to how important they are to the employer. Taking the time each year to survey the employees with regards to the benefit programs makes all parties aware of what is truly important to both. I usually suggest that the survey be done mid contract year, this way the employer is aware of issues to be concerned about for the next renewal. You will be amazed at how beneficial bringing the employees in on the process truly is.
What is an Employer to do?
I have been selling New Jersey Employee Benefits and group health insurance to small and medium sized businesses since 1997. Each year I see the plan design change slightly; there was higher co-pay, a split co-pay, higher drug card, two tier drug card, three tier drug card, and Hospital deductibles, in network deductibles. During this period the rates were rising. It was a challenge to bring a plan to the employer that was a slight increase over last year. Well things have changed, there are very few insurance carriers now offering the plans. The ones that do have raised the rates so much that a thirty percent increase over last year’s is the norm. I sit at my desk wondering what is happening, I have no options for the employer any longer, the rates go up, the plans keep offering less and less benefits. I do not see people utilizing the services less, what I see are companies forgoing the benefits all together. Is this what the insurance carriers want? Do they want to make it so the only people that take the insurance are the very ill and wealthy? What are employers supposed to do? Their employees think it is the employer that is reducing the coverage or lowering their contribution to raise the rates. I have no answers, all I have are questions. The most important one I have is what is Washington going to do to address these issues? The bickering between the Democrats and the Republicans and an ineffective President only delays and stalls the issue. Seems to me the Insurance and Drug companies are in control. In the end it is the American worker that is bearing the brunt of this problem and the final resolution is not even flicker of light at the end of a very dark and long tunnel.
Employment Practices Liability Insurance
I wanted to share a story about one of my clients. He was expanding his IT staffing business and hired a female recruiter /salesperson. This salesperson was emailing and interacting with the client’s operations staff at their offshore operations center. The emails started to turn more and more inappropriate, in a sexual way. The client is not sure who initiated the inappropriate emails but he now sees himself on the other side of a sexual harassment lawsuit. Needless to say the legal costs are great and he is scared to let any of these employee go. There is an insurance product that can protect your company from this type of exposure, Employment Practices Liability Insurance (ELPI). EPLI covers a business against claims by workers of the company, that their legal rights have been violated. Protection is provided against many types of employee lawsuits, including claims of: Sexual Harassment, Discrimination, Wrongful Termination, Breach of Employment Contract, and many others. The policies will reimburse your company against the costs of defending a lawsuit in court and for judgments and settlements. The policy covers legal costs if you win or lose the suit.
To prevent employee lawsuits, educate your managers and employees so that you minimize the problems in the first place. Create effective hiring and screening programs to avoid discrimination in hiring. Post corporate policies throughout the workplace and place them in employee so policies are clear to everyone. Show employees what steps to take if they are the object of sexual harassment or discrimination by a supervisor. Make sure Supervisors know where the company stands on what behaviors are not permissible. Document everything that occurs and the steps your company is taking to prevent and solve employee disputes. Contact us if you would like to learn more about employment practices liability insurance.
NJ Short Term Disability
We have had a few issues recently with regard to employees trying to figure out how to apply for NJ Short Term Disability. New Jersey, New York and Rhode Island are the only states that require employers to have this coverage. The NJ form (WDS-1) is available from the NJ State website. This form has all the detailed instructions for the EMPLOYEE to file a claim. The 3 part form needs to be filled out by the employee, employer and doctor. Submission is required within 30 days of the disability. We will make the form available on our website you can also contact my office for the form. As with most forms that deal with claim issues timely filing is most important.
DO I NEED WORKERS COMPENSATION?
I am asked this question thousands of times annually by small businessmen. Here are the rules, they apply if you own or operate a business in New Jersey. If you have an employee and pay wages you are required to obtain Workers Compensation. All Corporations operating in New Jersey must obtain workers compensation regardless if you have employees. Partnerships or LLC must obtain workers compensation if you have employees, owners for those entities can exclude themselves. If you cannot obtain coverage from an insurance carrier, the State will assign one to insure you. Rates are set by the State based on the employee’s duties. All rates will be the same regardless of the carrier. These are the basic rules, I would be glad to any question you might have about your business. Drop me a line alan@cgbins.com.
COST OF GROUP BENEFITS
As a business owner you must remember why you have a group benefits plan. Yes, it provides coverage for you and your family and of course your employees, but it is a great tool for recruiting and retaining GREAT talent. What you have to remember to do is let your employees know exactly what the cost is. I am amazed when I speak to employees of companies where the employer pays the ENTIRE cost of the health insurance, that they do not know what the cost is. If the employee fails to understand the value of the benefit, it is a worthless benefit. You can send them a notice at the end of each year letting them know how much you spent for their share of the benefits. They will start to think twice about moving to another job where the benefits are not as rich or the employer does not pay a greater share.
NEW YORK WORKERS COMPENSATION
I wanted to make all employers that have workers in New York State aware that they need a separate policy for Disability. Unlike New Jersey where Workers Compensation and Disability in incorporated in the same policy Disability in New York is written on separate paper. This issue has caused many employers to incur huge penalties and fines. The policy is quite inexpensive and is based on the number of male and female employees one has working in New York. Minimum premium is around $45.00 annually. New York is very harsh on employers that are unaware of this policy and $1000 for every 10 days of non compliance is charged. I have seen fines and penalties as large as $99,000. A call to your insurance agent can get you in compliance in a few minutes. Technology Insurance Associates offers this policy , give us a call or fill out the inquiry form on our website. We are glad to help.
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High Cost of Health Insurance
I am disturbed at the failure of Congress to do anything regarding the health insurance issue in this country. It is getting difficult for employers to have an affordable health insurance program for their company. The issue however might also be the fault of the employers that do not take responsibility for their health plan. They allow the employees to go on and off the plans arbitrarily. They accommodate the employee’s wishes without regard to the rules that the carriers put in place. This has an impact on the rates. We are seeing renewal rates of 15 to 40% a trend that is impossible to sustain. Someone has to take hold of this issue and act.
