Advantages of Offering a Defined Benefit Plan:

- Owners can contribute more than 401(k) limits of $16,500/$49,000
- Owners have option to overfund contributions (150%) in a good year
- Allows for larger tax deductions compared to defined contribution plan
- Employer contributions can be taken as a business expense deduction
- Excellent source of retirement income for employees close to retiring

Defined Benefit Plans Offer a Powerful Retirement Planning Tool for Small Businesses

When people think about their overall retirement strategy, they often include plans such as 401(k)s and IRAs.  Many overlook the possibility of using a defined benefit plan as an additional tool for reaching their retirement goals.  Defined benefit plans are often misunderstood, considered a thing of the past or erroneously thought to be appropriate only for large corporations. Defined benefit plans can provide a rich retirement planning tool and a very large tax deduction for small business owners.

California Health Care Legislation signed by Governor Schartzenegger

California
Last week, Governor Schwarzenegger (R) signed two bills that make California the first state to establish a health insurance exchange pursuant to PPACA. AB 1602, sponsored by Assembly Speaker John Pérez, and SB 900, sponsored by Senator Elaine Alquist, establish the California Health Benefit Exchange. During a phone call on Wednesday, President Obama reportedly encouraged Schwarzenegger to sign the companion bills so California's insurance exchange could begin operating by the January 2014 federal deadline. California's health insurance exchange is likely to be the largest exchange operated by a single state, with as many as 8.3 million residents expected to be eligible for coverage.
The exchange will provide consumers with a marketplace of insurance plans through a website that will provide standardized, detailed information about the plans and offer a toll-free number to help consumers understand their options. The exchange will also will provide resources to connect eligible Californians to federal subsidies for health coverage or government programs such as Medi-Cal, California's Medicaid program, as required by PPACA.

The bills also established an independent, five-member board to oversee California's exchange. The board will select health insurers to participate in the exchange and determine the process for enrolling Californians in the program. Governor Schwarzenegger will select two board members before his term ends and the legislature will appoint the remaining members.
The governor recently signed several additional health care bills, including:

• SB 1088, which allows young adults to retain coverage under their parents' health insurance plan until age 26
• AB 2244, which prohibits health plans from denying coverage to children with preexisting health conditions
• AB 2470, which bars health insurers from rescinding a member's health insurance coverage except in cases where fraud or intentional misrepresentation has occurred
• SB 1163, which requires independent actuaries to review and certify health insurers' rate filings to ensure that premium costs are calculated accurately and that all proposed rate hikes are posted on insurer and state websites
• AB 2345, which requires all health plans to cover certain preventive services with no cost-sharing

Reporting Employee Health Cost

Important News:
Effective October 12th, The Treasury Department and the IRS determined healthcare cost reporting would be
optional for Forms W-2 issued for 2011. This is meant to give employers more time to adjust their payroll systems to meet new reporting requirements.

A draft Form W-2 has also been released by the IRS to assist employers in preparing their payroll systems.  The
new form includes the codes employers can use to report the cost of coverage under an employer-sponsored group health plan.

Please keep in mind that although reporting the cost of coverage for 2011 is optional, the amounts are not taxable and will be used for informational purposes only.

For additional information, please visit the links below:

Click here to view the IRS News Release

Click here to download the draft Form W-2

Click here to download IRS notice Interim Relief with Respect to Form W-2 Reporting of the Cost of Coverage of Group Health Insurance Under § 6051(a)(14)

Six in Ten Women Don’t Know How They’ll Pay for Their Future Long-Term Care Needs

Fifty-nine percent of women ages 45 to 64 haven’t determined how they will pay for their long-term care needs, according to a recent AARP survey. Only 23% say they will be likely to pay for future care needs with personal savings.  Also, 40% don’t know that long-term care is more than nursing home care. “Studies consistently show that women are the biggest users of long-term care and we’re more likely than men to need these services. Yet we are so busy with our own hectic lives and caring for others that we’ll only address our own needs after everyone else’s.  Taking a little time and a few easy steps can provide for peace of mind now and in the future,” says Alyson Burns, Director of AARP’s Long-term Care Awareness Campaign.

Long Term Care Events Take an Emotional and Financial Toll on Caregivers

Seventy-three percent of primary caregiving family members say that a long-term care event has reduced their savings plans, according to a report by Genworth Financial. Of these respondents, 80% have decreased their retirement contributions. In addition nearly half of primary caregivers have lost a job or missed career opportunities as a result of family care giving responsibilities.

Colleen Goldhammer, senior vice president, financial institutions distribution, at Genworth said, “Too often, people measure the cost of long-term care simply in dollar terms, not taking into account the many other ways that it can affect a family. The most important step families can take to preserve their well being is to engage in proactive discussion around long-term care planning. An agent or advisor can play a key role in encouraging clients to take this important first step. Financial advisors have an opportunity to become valuable allies to pre-retirees considering ways to protect against the financial and emotional costs of a long term care event.”
The cost of long-term care continues to rise at steady pace nationally. The hourly rate for licensed home care is $19 while the median daily rate for a private room in a nursing home is $206, according to Genworth’s 2010 Cost of Care Survey.
Family relationships often suffer as a result of a long-term care event. Primary and secondary caregivers reported an increase in stress with their spouse, siblings, and with their children. In addition, 20% of primary caregivers and 12% of secondary caregivers said that their caregiving left them with less time to spend with their children. Goldhammer said that Advisors and agents are encouraged ask their clients whether a long-term care event is affecting their quality of life and the lives of their family members. The website, www.caringtalk.com, offers tips on how to break the ice to discuss long-term care issues with family members, guidance from experts, helpful dos and don’ts, and advice from people who have taken the important first step of discussing long-term care with their own families. For more information, visit www.caringtalk.com.

Structuring 401(k) Plans to Boost to Retirement Savings

Instituting auto-enrollment and auto-contribution escalation in 401(k) plans can result in a big improvement in retirement savings, especially for low-income workers. These are the results of a study by the Employee Benefit Research Institute (EBRI) and the Defined Contribution Institutional Investment Association (DCIIA).
Having a more optimal use of automatic features in 401(k) plans increases the chances for younger lower-income workers to hit a target of 80% pre-retirement real income replacement. The 401(k)s that include the following features are more likely to help workers achieve their retirement goals:
·      A higher automatic-enrollment contribution rate cap.
·      A successful program to reduce automatic contribution escalation opt outs.
·      A higher annual auto-contribution escalation rate.

Voluntary Benefits Give Employees the Edge

A national survey, conducted for WellPoint Inc., shows that voluntary benefits provide an edge when employees weigh the value of their jobs. In fact, 83% of employees think more highly of employers that offer voluntary insurance benefits than those that don’t. Nearly 90% of prospective employees said that, when it comes to accepting a new job, it is important to consider whether companies offer a full range of health benefits, including voluntary. Fifty-six percent called it very important.

While 82% of employees whose company offered voluntary benefits say they are satisfied with their offerings, that satisfaction falls by 30% for those whose companies don’t offer such benefits.
Sixty-seven percent of employees say their company offers voluntary insurance. The employees who are more likely to say their company offers voluntary insurance are men (71%), those in the Northeast (74%), those at large companies (81%), and those with an average household income of $50,000 or more (74%).
Only fifty-six percent of workers say they are knowledgeable about the voluntary insurance products offered at their companies. Sixty-seven percent say that having their employer provide voluntary benefits would increase their productivity. The top reasons employees enroll in voluntary benefits include cost savings (54%), greater protection for their families (50%) and ease of mind (44%). For more information, visit http://www.wellpoint.com.

Businesses Plan to Hire Additional Staff in 2011

 

Businesses across the globe are now looking to hire new staff, according to the Regus Business Tracker survey. U.S. business was close to the global average with 32% of companies preparing to add new staff in 2011. “As companies look to find economies in their own operations, we are likely to see more and more organizations offering flexible working practices to their existing or prospective employees in a bid to achieve a better work-life balance and run a leaner organization,” said Sande Golgart, regional vice president for Regus.
The fact that companies are looking to hire additional staff will be regarded as a significant indicator that the mindset of organizations has shifted toward investment in growth through human capital, according to the report.
Golgart said, “The intention to increase headcount is a clear indicator that businesses want to be prepared to grasp the opportunities that recovering markets may throw their way. The U.S. in particular is still suffering from high unemployment levels, at 9.6%, although private sector payroll continues to increase slightly and this finding should be taken as a positive indication for employment.” The survey revealed that 41% of companies are still looking to reduce their overhead through means other than reducing staff. This reveals an attitude of cautious optimism.
For more information, visit: www.regus.com.

Free Navigating Your Health Benefits for Dummies - Free Stuff & Freebies

Free Navigating Your Health Benefits for Dummies - Free Stuff & Freebies

Corporate Wellness Doesn’t Just Save Money; It Makes Money

The “double whammy” of skyrocketing healthcare costs and a sputtering economy—as if the cost of healthcare wasn’t a concern in the years before the recession—have put companies in an almost impossible situation. At the same time staffs are being reduced, providing healthcare for the remaining workforce demands more expense and more sharing of the load with employees, leaving everyone feeling a little sick about healthcare. To put in perspective the reality of the crisis, according to the current Towers Perrin Health Care Cost Survey, an employee’s average medical costs have increased by 7 percent over 20091. The average employee share of medical costs has increased 10 percent. According to the same report, workers’ earning have increased 37 percent since 2000, but that hardly dents the 149 percent rise in active employee health care costs during the same period^[1]. Of course, most businesses are facing the same affordability gap.

read more at: Corporate Wellness

Workplace wellness…a collaborative approach

Sharon M. Weinstein

A workplace is only as good as how it treats its workers.   Let’s explore this concept of wellness, and the trends that have evolved.  see full article at:  Corporate Wellness

Kaiser Health Plans Rated #1 in California by Consujmer Reports

Release Date: 10/05/2010

Health and NCQA Publish Rankings of 227 HMOs and Point-of-Service Plans

President Obama Answers Questions on Health Reform
YONKERS, NY — With open enrollment season now underway, consumers with employer-based health insurance can take advantage of the once-a-year opportunity to switch plans.  To help consumers compare health insurance plans, Consumer Reports Health is today publishing rankings of 227 HMOs and Point-of-Service (POS) plans.  The Rankings are produced by the non-profit National Committee for Quality Assurance (NCQA), the main U.S. group that sets measurement standards for health insurance, accredits plans, measures the quality of care they achieve, and publicly reports the findings.  

Disability:CASE OF THE WEEK:

Had an application on the husband. The wife was the instigator since she was a stay at home mom. Went to underwriting and when the labs were done - there was nicotine found. So - other than that the policy was issued as applied for - except for smoker rates. The wife absolutely did not believe that this could be correct. She had strong words for our case worker about mistakes and not handling the file correctly. They did not accept the contract.

One month later - through a difference producer - we get in an application on this same client. The application was for a smoker rate...

Sebelius Says Medicare Advantage Plans Will Not Suffer Because Of Healthcare Law.

 

The Pittsburgh Post-Gazette (10/5, Malloy, Twedt) reports, "Medicare Advantage plans, exceedingly popular in Western Pennsylvania, will not wane under the new healthcare law, Secretary of Health and Human Services Kathleen Sebelius insisted Monday." During a "meeting with a handful of DC reporters...Ms. Sebelius said the decision by a large Massachusetts insurer to leave the Medicare Advantage market is not a harbinger of the program's decline." She stated, "My guess is companies will continue to cite this law from now on -- it's an easy mark. ... But frankly, any company that pulled out of the Medicare Advantage plan this year, my guess is that they had business plans to do that whether or not the president signed this law in March of 2010."

States Watch As California Implements Health Benefits Exchange.

 The Sacramento Bee (10/5, 3A, Calvin) reports, "California's push to be the first in the nation to establish a health benefits exchange is being closely watched by other states as they act on implementing key elements of the national healthcare overhaul law." The Bee notes that Governor Schwarzenegger and the California Legislature will "soon begin considering appointments to the five-member oversight board that will be responsible for running the exchange -- and as the board begins its task of defining how the new exchange will operate."

States Receive $1 Million From HHS To Set Up Health Exchanges.

 

The AP (10/5) reports, "Federal officials say Nebraska and the Dakotas will each be getting $1 million to help the states establish a health insurance exchange. The exchanges, created by the federal Affordable Care Act, are meant to be one-stop shopping where people can purchase health insurance coverage," and "they're scheduled to be in place in 2014." Notably, HHS "is distributing nearly $49 million to help the states do the planning necessary to establish the exchanges and decide how they'll operate."

HHS Accepts More Employers Into Program Subsidizing Retiree Health Benefits.

 

CQ HealthBeat (10/5, Reichard, subscription required) reports, "Almost 3,000 employers and unions have been accepted by the program created by the healthcare overhaul law to help pay the medical costs of early retirees," HHS "announced Monday." This represents an increase of 1,000 since "August, when the first round of acceptances were announced for applications to the Early Retiree Reinsurance Program." HHS Secretary Kathleen Sebelius stated in a press release, "I am incredibly pleased to see so many employers embrace this important new program to maintain coverage for people who often have a difficult time finding affordable coverage."

        The AP (10/5) notes, "More than 40 more Michigan employers and unions will get help providing health coverage to early retirees and their families. They're among nearly 1,000 additional employers and unions approved nationwide to participate in the $5 billion Affordable Care Act's Early Retiree Reinsurance Program." To date, "there are...142 participants from Michigan in the program."

        The Pittsburgh Tribune-Review (10/5, Fabregas) reports that "Sebelius yesterday used a visit to Mine Safety Appliances Co. to shore up support for the much debated federal healthcare law. During a stop at the company's Cranberry headquarters, Sebelius touted a program that aims to help employers pay for health insurance coverage for early retirees." Sebelius said about retiree health coverage, "It's often difficult to get and impossible to afford." Notably, "about 29 percent of large firms provided workers with retiree health coverage in 2009, down from 66 percent in 1988." Modern Healthcare (10/5, Vesely, subscription required) also covers the story.

2011 HSA legislative changes, updates

HSA Plans

DOL "Plan/Prevent/Protect."

In its Spring 2010 Regulatory Agenda, the U.S. Department of Labor (DOL) had issued a new regulatory and enforcement strategy for all businesses referred to as "Plan/Prevent/Protect."

While the specifics of the program are still being defined, the new program involves the following:

Plan: The DOL will propose a requirement that employers create a plan for identifying and remedying risks of legal violations and other risks to workers. The employer would provide their employees with opportunities to participate in the creation of the plans. In addition, the plans would be made available to workers so they can fully understand and help monitor their implementation.
Prevent: The DOL will propose a requirement that employers thoroughly and completely implement the plan in a manner that prevents legal violations. The plan cannot be a simple paper process: the employer cannot draft a plan and then ignore it. The plan must be fully implemented for the employer to comply with the "Plan/Prevent/Protect" compliance strategy.

Protect: The DOL will propose a requirement that employers ensure that the plan's objectives are met on a regularly. Not any plan willdo. The plan must actually protect workers from violations of their workplace rights.

While the DOL continues to work on the specific details of what an employer's compliance initiative should look, employers should at least to consider starting to develop and establish an HR compliance action plan.