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5. Package your benefits. Some insurance carriers provide discounts if you purchase multiple types of insurance from them.

4. Check out alternative methods of funding your insurance. Self insurance is popular in the middle to large group market, but now some carriers are offering self insurance for small groups.

3. Explore plans with higher deductibles and co-pays. The higher the deductible and co-pay are, the lower your premiums will be. This will increase out of pocket expenses, but for some groups with low utilization; this may be a good alternative.

2. A mini-medical plan with high deductibles and limited benefits may be a wise choice for young workers who don’t need a richer benefit plan.

1. Purchase consumer directed healthcare plans such as HRAs or HSAs. Many of the HSA plans for example, have come down in price making them an excellent way to save money for medical expenses while having lower premiums.

Millions of small businesses will receive postcards from the IRS beginning the week of April 19 that alert them to the new Small Business Health Care Tax Credit and encourage them to check their eligibility. Even if you don’t receive a postcard, your business still may be eligible.

Here’s how to determine if you are eligible:

Eligibility Rules

• Providing health care coverage. A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
• Firm size. A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
• Average annual wage. A qualifying employer must pay average annual wages below $50,000.
• Both taxable (for profit) and tax-exempt firms qualify.

Amount of Credit

• Maximum Amount. The credit is worth up to 35 percent of a small business’ premium costs in 2010. On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
• Phase-out. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.

Three Simple Steps for Employers to Qualify

To determine if your small business or tax exempt organization qualifies for the Small Business Health Care Tax Credit, follow the three simple steps on the IRS’ fact sheet.

Yesterday President Obama signed into law an extension for the existing COBRA subsidy for employees that were involuntarily terminated from April 1st to May 31st. The subsidy provides a 15 month long 65 percent premium subsidy to employees to assist them during their transition to new employment. President Obama is looking to legislators to extend the subsidy to employees that were terminated for the whole year.

The COBRA subsidy was fist enacted in 2009 as part of the American Recovery and Reinvestment Act to provide affordable health insurance coverage for recently terminated employees. According to USA Today COBRA enrollment has increased by 20 percent when no subsidy was available.
In addition, workers that let their COBRA lapse due to their subsidy expiring can re-active their COBRA with the subsidy if they pay back premiums.

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.

With the recent signing of the Patient Protection and Affordable Care Act many employers will face numerous changes to their health care plans. It is our goal at CG Benefits Group to provide you with the most comprehensive resources for understanding your health care requirements as an employer.

Some of the mandates that will be required in the future:

1. Lifetime and annual limits
2. Coverage of adult children
3. Pre-existing conditions exclusions
4. Employer play or pay provisions

Lifetime and Annual Limits

Effective in 2010 group health plans may not establish lifetime limits or “unreasonable,” annual limits on the value of essential health benefits. Health and Human Services has to still define what constitutes unreasonable limits and essential health benefits.

Coverage of Adult Children

Effective in 2010 a group health insurance plan must provide coverage of an adult child until age 26. The adult child may not be eligible for other employer sponsored health care. It is important to note that New Jersey has been a leader in insuring adult children up to age 31. This segment of adult children are the largest group of uninsured Americans, so this extended coverage nationwide will help many people secure insurance.

Pre-existing Conditions Exclusions

No group plan may limit coverage for pre-existing conditions for children under the age of 19. Beginning in 2014, a group health plan many not limit coverage of anyone for pre-existing conditions.

Employer Pay or Play Provisions

By far the most controversial portion of the bill in our view is the employer pay or play mandate. According to the reform bill, employers with over 50 employees will be required to offer “affordable” health insurance or they will face large fines. Fines can reach up to $2000 times the number of full time employees if an employer does not offer health insurance coverage. Employers who do not provide “affordable” coverage will be fined $3000 times the number of employees receiving federal subsidies. The health and Human Services office will have to clarify what is considered affordable for each region of the US. In my opinion this mandate will be unfair to large employers in the service and hospitality industry. One of our clients who owns multiple restaurants will have to offer coverage to his servers. I don’t think this is fair; in the past many restaurants only provided health insurance to their management and not for servers or other lower wage workers. It is not clear from the bill, if all employers who have over 50 employees will have to conform to this mandate or if there will be additional requirements based on the type of business, revenue received, or workers income.

Do you have any questions about the health care bill? Please post your comments and we will have a licensed insurance professional answer your query.

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.

Three property and casualty insurance producers from Technology Insurance Associates attended a two week long conference in King of Prussia, PA at the beginning of last month. Producers Daniel Levenson, Jeff Henderson, and Ben Levenson all went to the United States Liability Insurance Group (USLI) conference to learn more about helping businesses control their risks using liability insurance.