Wednesday, November 24, 2010

Need to Know Regarding Health Savings Accounts (HSAs) in 2011

Effective January 1, 2011, you will no longer be able touse your health savings account (HSA) dollars to pay for over-the-counter (OTC) medicines at a pharmacy, supermarket or other retail store without a prescription from your doctor. If you have a health care debit card you can still use it ot pay for the prescription medicines, including insulin, if those are eligible expenses under an employer's health plan. If you have a prescription for an OTC medicine, such as Zyrtec or Prilosec, and use your HSA to pay for it you will need to keep copies of the prescription and receipt for the purchase with your tax records.

Beginning January 1, 2011, if your HSA is used to pay for items or services that are not qualified medical expenses, the IRS penalty will increase from 10 percent to 20 percent of the HSA dollars used.

Information provided from UnitedHealthcare November 2010

Tuesday, November 16, 2010

Important Grandfather Rule Change Will Impact You

On November 15, 2010, the Departments of Health and Human Services, Labor and the Treasury made an amendment to current Grandfathering rules. Previously, one of the ways an employer group health plan could lose its grandfather status was if the employer changed issuers – switching from one insurance company to another.

The amendment allows employers to switch insurance companies and shop for the same coverage at a lower cost while maintaining their grandfathered status, so long as the structure of the coverage doesn’t violate one of the other rules for maintaining grandfathered plan status.

What does this mean for you?
You will now have greater leeway to compare and purchase plans from carriers other than the one in force without losing grandfathered status.

Friday, November 12, 2010

Are you opting for a High Deductible Health Plan?

According to the LA Times November 2010-
Rising costs lead to a nearly threefold increase in the number of workers covered by the policies since 2006.
Health experts worry about consumers who forgo preventive care. Is this you?
Looking to save money in a weak economy, Americans increasingly are turning to health insurance plans with low premiums and high deductibles — prompting doctors and health experts to worry that consumers may be skipping routine care that could head off serious ailments. Nationally, the number of workers with individual deductibles of at least $1,000 has nearly tripled over the last four years, reaching about 20 million, according to a recent survey of employers. Some have pushed their deductibles as high as $10,000, and, to keep medical bills low, are forgoing colonoscopies, blood tests and other preventive procedures.
for more of this article email us at acctmgr@mycbainc.com

Monday, November 1, 2010

CHOOSE A HEALTH CARE PLAN WITH CONFIDENCE!

Take control of your family’s medical costs without sacrificing the protection you need

Few things are more important than safeguarding your family’s health. With so many providers raising premiums and reducing benefits how do you get the adequate coverage for what you are paying for?

Ask yourself these five key questions to find the best care for your budget. More ... To Receive a copy of our November ENewsletter email us at acctmgr@mycbainc.com

Also you will find updates on the Health Care Reform along with Broker Tips & more

Friday, October 22, 2010

NAHU Provides New Guidance and Relief on W-2 Reporting and Information on Child-Only Policies

The Obama Administration issued two new pieces of important guidance this week on PPACA provisions—IRS guidance on making the employer health insurance premium cost reporting requirements on W-2 forms optional for the 2011 tax year. To get more information, call us at 303-663-7844.

Thursday, October 7, 2010

Your Guide to Preventive Services Under the Health Care Reform

The new health insurance plans beginning on or after September 23, 2010, must cover preventative services without copayment, coinsurance, or deductible, when these services are delivered by a network provider. Call us for the 5 page detailed description of what is exactly covered. 303-663-7844.

Thursday, September 23, 2010

Six Months to Go Until the Largest Tax Hikes in History

July 1, 2010

Ryan Ellis, ATR Tax Policy Director

In just six months, the largest tax hikes in the history of America will take effect. They will hit families and small businesses in three great waves on January 1. 2011:

First Wave: Expiration of 2001 and 2003 Tax Relief

In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners and families. These will expire on January 1, 2011:

Personal income tax rates will rise: The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:

· The 10% bracket rises to an expanded 15%
· The 25% bracket rises to 28%
· The 28% bracket rises to 31%
· The 33% bracket rises to 36%
· The 35% bracket rises to 39.6%

Higher taxes on marriage and family. The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of income. The child tax credit will be cut in half from $1000 to $500 per child. The standard deduction will no longer be doubled for married couples relative to the single level. The dependent care and adoption tax credits will be cut.

The return of the Death Tax. This year, there is not death tax. For those dying on or after January 1, 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes and a retirement account could easily pass along a death tax bill to their loved ones.

Higher tax rates on savers and investors. The capital gains tax will rise from 15 percent this year to 20 percent in 2011. The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. These rates will rise another 3.8 percent in 2013.

Second Wave Obamacare

There are over twenty new or higher taxes in Obamacare. Several will first go into effect on January 1, 2011. They include:

The “Medicine Cabinet Tax” Thanks to Obamacare, Americans will no longer be able to use health savings account (H.S.A), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).

The “Special Needs Kids Tax” This provision of Obamacare imposes a cap on flexible spending accounts (FSAs) of $2500. (Currently, there is no federal government limit). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education.

The H.S.A. Withdrawal Tax Hike. This provision of Obamacare increases the additional tax on non-medical early withdrawals from an H.S.A. from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.

Third Wave: The Alternative Minimum Tax and Employer Tax Hikes

When Americans prepare to file their tax returns in January of 2011, they’ll be in for a nasty surprise – the AMT won’t be held harmless, and many tax relief provisions will have expired. The major items include:

The AMT will ensnare over 28 million families, up from 4 million last year. According to the left-leaning Tax Policy Center. Congress’ failure to index the AMT will lead to an explosion of AMT taxpaying families – rising from 4 million last year to 28.5 million. These families will have to calculate their tax burdens twice, and pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers.

Small business expensing will be slashed and 50% expensing will disappear. Small businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment purchases up to $250,000. This will cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be “depreciated”.

Taxes will be raised on all types of businesses. There are literally scores of tax hikes on business that will take place. The biggest is the loss of the “research and experimentation tax credit”, but there are many, many others.

Tax Benefits for Education and Teaching Reduced. The deduction for tuition and fees will not be available. Tax credits for education will be limited. Teachers will no longer be able to deduct classroom expenses. Coverdell Education Savings Account will be cut. Employer-provided educational assistance is curtailed. The student loan interest deduction will be disallowed for hundreds of thousands of families.

Charitable Contributions from IRAs no longer allowed. Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA. This contribution also counts toward an annual “required minimum distribution”. This ability will no longer be there.

Know Your Employee Benefits

Health Care Reform: The Who, What and When

Here is a look at some of the major health care reform provisions that you will see over the next decade.

2010

Employers: Small businesses can receive tax credits if purchasing insurance for employees.

Insurers: Cannot impose preexisting condition exclusions on coverage for children. Must cover preventative services without co-pays. Cannot remove coverage when a person becomes ill. Cannot impose lifetime coverage limits.

Uninsured: Individuals with preexisting conditions receive immediate access to coverage through a high-risk pool. Dependent children can remain on parents’ plans until age 26.

Early retirees: Employers will be able to participate in a reinsurance program to help provide coverage for retirees and their spouses, surviving spouses and dependents over age 55 and not eligible for Medicare.

Medicare Part D enrollees: A $250 rebate check received for those entering the “doughnut hole” gap in coverage in 2010. Rebate payable by April 1, 2011.

2011

Insurers: Required to spend at least 80 percent of premiums on medical services.

Medicare Part D enrollees: Receive a 50 percent discount on brand-name prescription drugs when in doughnut hole coverage gap.

Those with health care savings accounts: Federal tax on those who spend health care savings account money on ineligible medical expenses increase to 20 percent.

Over-the-counter drugs: Except for insulin OTC drugs without a prescription are not reimbursable from an FSA or HRA, and are not a tax-free reimbursement from an H.S.A.

W-2: The value of your health coverage must be disclosed on your W-2 form.

2012-2013

Taxpayers: Medicare payroll taxes increase to 2.35 percent for individuals earning more than $200,000 and families earning more than $250,000.

Those with flexible savings accounts: A federal limit of $2,500 for individual pretax contributions per year.

2014

Employers: Companies with 50 or more employees must provide affordable coverage or pay a penalty.

Insurers: Prohibited from refusing to sell or renew policies. Cannot deny coverage for adults with preexisting conditions. Limits ability to set prices on the basis of sex, health status or other factors. Prohibited from imposing annual limits.

Uninsured: Most Americans required to buy health insurance or pay fines of $95 per individual and up to $285 per family.
Families will pay half the amount for children. Families can receive subsidies to buy insurance if they earn no greater than four times the federal poverty level
(about $88,000 per year for a family of four). Individuals and small businesses can buy packages through state exchanges.

2015

Uninsured: Penalties for not carrying insurance increase to $325 per individual and up to $975 per family. Families will pay half the amount for children.

2016

Uninsured: Penalties for not carrying insurance increase to $695 per individual and up to $2,250 per family or 2.5 percent of taxable family income – whichever is greater. Families will pay half the amount for children.

2018

Taxpayers: A 40 percent excise tax imposed on high – cost employer-provided policies ($10,200 for individual coverage or $27,500 for family coverage).

2020

Medicare Part D Enrollees: Prescription drug coverage gap eliminated.

Thursday, June 24, 2010

How Will the New National Health Insurance Law Affect You?

For answers to 107 Frequently Asked Question Call 303-663-7844.

Colorado Benefit Advisors, Inc.
Steve Meyer, President CBC
Amy Cline, Account Manager