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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.

USLI specializes in providing liability insurance to low risk industries such as Information technology companies. This was a perfect match for Technology Insurance Associates since so much of their clientele are involved in the IT consulting field.

During the class the producers from technology Insurance Associates interacted and learned from over twenty classmates who work in various areas of the insurance field.

At the end of the class, the producers had a chance to test their presentation skills in a mock presentation dedicated to providing insurance for community churches. Producer Daniel Levenson won the presentation with two of his classmates to earn two hundred Dollars each. When asked what he learned the most from the presentation, Daniel said that he, “learned how to keep control of the presentation and get desirable answers from his prospects.”

Overall the producers viewed the conference as helpful and look forward to more learning opportunities in the future.

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.

Editor’s note: This is a special post by Insurance Broker Jerel Levenson of Technology Insurance Associates.

Every business owner is talking about the new health insurance reform signed into law by President Obama today. How will this affect me, what are my responsibilities?

The questions are overflowing.

As of today, there are no changes to the system, those changes that will occur, we will not see till calendar year 2014.

There are many legislative hurdles that must be jumped before the final legislation is enacted.

What I can tell all my clients is not to jump to conclusions and nothing will change today, remember the changes are down the road.

Anything I report is not the final law and will be changed many times before 2014.

Businesses that employ under 50 individuals will see no changes. Those over 50 employees will be required to OFFER health insurance. NO definition of contribution or participation levels have been discussed.

Every individual will be required to have insurance, how this will be policed has yet to be announced.

There will be standards established for every health insurance policy – these have yet to be announced

As time goes by, we will learn how the new law will affect all of us. For today, the system will remain exactly the same.

Some minor changes will occur within 6 months, children will be covered under parents till age 26.

Pre-existing conditions will phase out over time.

These are good ideas and ones that will help everyone. Remember, as the rules change , we will all be notified . We will all have time to make and plan for the changes.

Today’s system is definitely in need of repair, hopefully our legislators will make the correct changes and we will all see a better system.

American policies and laws have evolved over hundreds of years, the reform of health insurance will take time. Support those that support you and the system will evolve into one that is better for all of us.

There are a number of small business resources on the Web where you can learn more details.

Editor’s note: This is a special post by our Customer Service VP, Gail Levenson

I am a health insurance producer in New Jersey and I get this question all the time.  A patient receives a bill and wonders why the doctor is billing them.  The best way to keep track of what you owe your healthcare provider is to keep the Explanation of Benefits (EOB) that is sent to you by the insurance carrier each time you see a provider.  Instead of opening up the envelope and discarding the papers inside take the time to look at them and you will see that this document tells you what you owe your doctor and why.  By the way, for most carriers you can also get your EOB online at member services so you don’t even have to wait for the mail.

The EOB will contain the following information:

• Name of the Insurance Company
• Subscribers name and address
• Patient’s name
• Provider’s name
• Provider’s tax ID#
• Claim date of service
• Total billed charges
  • the amount the provider sent to your insurance company
• Allowed amount
  • the payment a provider has agreed to accept for the service under the terms of a negotiated contract with the insurance company.  This amount applies to in-network providers only.  The allowed amount can also be the maximum the insurance company will allow for a specific service.
• Discount amount
  • the amount the insurance carrier adjusts the bill because of the negotiated rate agreed upon between the provider and the carrier.  This is for in-network providers only.
• Copays and CoInsurance
• Deductible amount
• Patient responsibility amount
• Total payment and to whom it was paid
• A remark section
  • The patient responsibility amount is what you owe the provider.  Be aware that some EOB’s include the copay, coinsurance and deductible amounts and some don’t so it is up to the subscriber to know what they already paid the provider and deduct that amount from the patient responsibility amount if necessary.

Learning to read and use the EOB will help you keep track of your payments to your providers.

The calls were coming in from many of my clients today.  They are all concerned on how President Obama’s new healthcare reform law affects them.  Here is my take,  RELAX!  Your current group health insurance plan is active and will continue as is.  At renewal the insurance carriers will offer you insurance quotes with all the new updates that need to be added ( if any).  Your current contract just cannot be terminated.  This new law is focusing on the uninsured and plans and States that deny coverage for pre-existing conditions.  We are all busy here at Technology Insurance Associates and CG Benefits Group dissecting this new law and coming up with plans and strategies to help you continue to provide your employees with a coverage that is low cost and offers quality benefits.

RELAX.  More to come…