Category Archives: Business Tips


Root of All Evil or the Holy Grail? Health Insurance in the Age of Obamacare

girl-reaching-appleMany believe that the private health insurance market has been the “root of all evil” when it comes to offering affordable health care in the United States today. Ironically, these same companies that many consumers dislike may end up being the same companies that consumers turn to with the implementation of Health Care Reform.

With the implementation of health care reform, companies will have the option to sell their plans on the exchange, off the exchange or have a plan offering in both markets. Some carriers will choose to sell their plans on theexchange in an effort to enroll more consumers that ordinarily would not be able to purchase coverage without the help of government subsidies. Although these plans may be more affordable and purchasing them will come with help from the US government through subsidies, their networks are not appearing to be as expansive as those of a private market carrier. This is vital to obtaining the value and service that you will need as a consumer. If you are out of network or do not have an adequate number of health care providers in network, you may be left with an insurance plan that does not cover some major healthcare expenses.

The private market plan networks are expected to remain as expansive as they are now, and for many consumers are the reason why they pick a certain plan. Their plan option may cost more than another option they may be looking at, however, if that network has more doctors available, or nationwide coverage for an individual that travels a lot, then a higher premium may be a small cost to ensure coverage.

The private market options will also be able to offer the package pricing on the ancillary lines of coverage that are not available through the exchangecurrently. United Healthcare, Aetna, and Humana, and others that offer dental, vision, disability, and group life products, will be able to integrate many of these products and services into existing group health offerings. Pricing discounts, streamlined and consistent billing, as well as consistent online user access are all benefits of implementing a group health insurance policy through the private market. By going through the exchange, these services need to be placed in addition to exchange plans, which can create duplicate processes which can be timely and expensive for a small business owner.

Carriers like Aetna and United Healthcare have been very vocal lately, issuing press releases in some of the largest markets for healthcare, stating that they will not be participating in the state based exchanges. Aetna has advised that they will not be participating in the New York or Connecticut exchange, and United Healthcare will not participate in the New Jersey, or Pennsylvania exchanges. This is catching many off guard as these titans of the private market believe that they can offer coverage that is more reasonably priced and more accessible by consumers by not participating in the exchange. This news will definitely disappoint many as they are looking to enroll in exchanges with a more established and reliable partner in the healthcare space. This also provides some insight into the eyes of the carriers to the strength of the exchanges in terms of cost and plan offering of healthcare as opposed to what they can deliver to consumers outside of these marketplaces.

Countdown To Obamacare Special Report

admin-ajaxIn 100 days, the Affordable Care Act, otherwise known as Obamacare, will become law the land. Some key elements of the the bill will not take effect on January 1, 2014, and, if some Republican members of congress have their way, the law will not be funded and essentially be voided.

However, as Small Business owners know, expecting only one unlikely outcome is no way to run a business. Thus, with barely three months left until the law is in effect, Newtek, the Small Business Authority,
a health insurance broker for small businesses, recognizes there is an urgency for both employers and employees to understand what to expect and what to do.

Beginning Monday, we will be posting five blogs here to help you understand the key elements of the bill that are going to take effect.

The first blog, “Understanding the Exchanges” will cover the newest, and perhaps most critical element of the Affordable Care Act — the online marketplace created by the government to shop for health insurance plan.

The second blog, “ Understanding the Exchange Plans” explains the five different coverage options available on the Exchange.

The third blog, “ Understanding The Private Market Options” addresses the changes many health care plans will be making as ObamaCare takes effect.

The fourth blog, “ The Five Things Small Businesses Need To Know” will identify what is required of employers and employees.

The fifth blog, “ The Three Q’s of ObamaCare: Quality, Quantity, and Quitting” will cover the impact ObamaCare may have on you and your family’s healthcare.

With the end of the year fast approaching, businesses need to anticipate both their responsibilities and their employees needs in the coming year. These blogs should illuminate many of the concerns and eliminate some of the anxiety about the bill.

ObamaCare Statistics That You Oughta Know

obamacare-logoWell, we all know by now that Health Care Reform and its real world iteration (often referred to as ObamaCare) is on its way. And even if you live in a cave, you have probably heard endless debates amongst the pundits both for and against its indoctrination.

Specifically, Health Care Reform directly references the comprehensive health care reform law enacted in March 2010. The law was enacted in two parts: The Patient Protection and Affordable Care Act (PPACA) was signed into law on March 23, 2010, and was amended by the Health Care and Education Reconciliation Act on March 30, 2010. The name “Affordable Care Act” is used to refer to the final, amended version of the law … often times referred to as both “Health Care Reform” and “ObamaCare.”

Now that its implementation is foregone conclusion, what do “the people” really think about what is on the horizon? Sure, some of the statistics trickling in are not surprising, but a collection of data from independent, non-partisan studies is painting an interesting picture. Here’s what we collectively think about where our health care is headed:

How we prefer to consume insurance information:

  • 85 percent of all people (56 percent of employers) still say they rely heavily on media to explain health-care reform details.
  • More than half of larger employers (more than 500 employees) are turning to brokers and consultants for information.

Satisfation/Expectation:

  • 62 percent of Americans without health insurance think ObamaCare will be good for America.
  • In contrast, 42 percent of Americans with health insurance think so.

Gen Y vs. Baby Boomers:

  • They Gen Yers (65 percent of them) believe ObamaCare will have a positive impact.
  • Baby boomers feel differently with only 34 percent believing healthcare reform will do them any good.
  • Inasmuch as Gen Y is concerned, only 44 percent say they are currently satisfied with their medical coverage.
  • Yet, 63 percent of Boomers are currently satisfied with their health coverage.

Affects of current health issues among us:

  • If one suspects his or her health to be “fair or poor,” 64 percent of those who fall into that category look favorably on ObamaCare.
  • Conversely, those with “very good or excellent” health only have a 28 percent approval rating for ObamaCare expectations.

World of Employers:

  • 41 percent of employers report that “they still aren’t sure” how they will handle new policy implementation.
  • 36 percent of employers are concerned about non-medical benefits and if those will also be affected by the new legislation.
  • Only 44 percent feel they won’t have to make any drastic changes.
  • For now, only 5 percent of employers believe they will have to reduce employee benefits.

At Newtek Insurance we have kept our finger on the pulse of ObamaCare and the mandated changes therewith. If you have any questions or concerns, contact us today at 1-88-284-3722 to speak with an expert. We’re here to help.

Am I Required To Offer Employee Health Coverage?

Employee benefitsIf you have less than 50 employees:

  • Will not be required to offer a company health plan
  • Employees will still be required to purchase insurance
  • Individual premiums can jump 100%+
  • Small group pricing is expected to jump about 20% – 50%
  • Obamacare will create a competitive advantage issue for a lot of smaller companies who may risk losing employees to companies that can provide benefits
  • Changes in health insurance options may have an impact on your property and casualty insurance policies, and should be reviewed to address of all of your risk.

Over 50 employees:

  • Will be required to offer benefits
  • Not all states will have full exchange capabilities
  • Common ownership will be enforced, which means that companies that break employees up into different LLC’s will still be required to offer benefits
  • Small group pricing is expected to jump about 20% – 50%

What does this mean for me?

As a business owner, you need to understand your current health insurance program, and make sure that all benefits are being administered as efficiently and effectively as possible. By integrating your processes (payroll, employee benefits and commercial insurance) you have the ability to streamline the underwriting and administration process, while ensuring the best price and coverage.

Questions? Concerns?

Leave a comment here or call Newtek Insurance Agency at 855-2thesba to review your options, compare your pricing, and determine the option that is best for your business.

Directors and Officers Insurance a MUST!

26243535_fullDid you know that directors of public or private companies can be held liable for their decisions? Sure, anything is possible one might think, but statistics show this reality is far more pervasive than one might expect. In fact, more than 39% of private companies (with more than 25 employees) had a D&O (Directors & Officers) suit filed against them in the last five years.

Does that seem exorbitant?

Well, when one considers who is doing the suing, it seems more understandable. D&O suits are brought by employees, shareholders, investors, competitors, suppliers, customers, and lenders. This is not to say that every lawsuit is a victory for those who bring them, but whether a company successfully defends itself (or its directors and officers) or not, such suits bring and average cost of 310K. That could be devastating to a small company.

So what can be done to avoid such an atrocity? Well, other than perfect leaders beloved by all, a good D&O insurance policy comes highly recommended. Such policies provide financial protection to Company leaders in the event they are sued regarding their performance or duties with the company. In many cases, a D&O policy is the only line of defense for these types of suits or claims.

There are some policies that bundle Fiduciary and/or Employment Practices Liability which can be a huge difference maker. Employment practices amount to about half of all claims, particularly in a strained economy where layoffs and downsizing become more prevalent. The policy will serve as a strategic line of defense whether or not allegations are warranted.

So you think a good D&O policy is worth considering but you’re not sure where to start? Here is a list of important criteria:

  • A policy that will cover the company as well as the individual directors and officers.
  • Punitive damage coverage
  • Good record with D&O claims that may be provided with your query
  • HR consultation program
  • Separate EPLI and Management Liability Limits
  • Affordability – it has to fit company budget

Most insurance providers that meet the points above are likely qualified to help, but if you want to speak directly with an expert, call 1-855-284-3722 or email info@thesba.com to have someone reach you.

Obamacare Employer Mandate Delayed Until 2015

news-delayed-1211pgOur recent blogs and Small Business Authority Market Sentiment Survey have depicted a sense of uncertainty and lack of clarity amongst business owners as to what to do to prepare for the PPAHCA. This uncertainty has continued to exist with a persistent stubbornness. The administration, in its wisdom, has delayed a key provision in ObamaCare, the “Employer Mandate.” Allbusinesses with over 50 employees must provide health insurance to their staff  or face fines up to $3,000 per employee.

The consumer mandate, which Chief Justice Roberts refers to as a tax, is not delaying its start date of 2015, so individuals not covered under an employer plan must obtain health coverage or face fines beginning in 2014. This announcement came yesterday from the Treasury Department, right before the July 4th holiday is to begin for many businesses and Americans.

Our clients, small independent business owners, could argue the merits of the PPACA ad nauseum, but could not really argue the concern over the rush to implement it quickly. As Nancy Pelosi once said, you have to “pass the act to know what’s in it.” This message and confusion has created great pushback by taxpayers, citizens and even government administrators, who know that this 2000+ page act requires a huge cost and administrative burden to implement and manage. Rules are being perpetually rewritten and updated and a January 2014 start date for employers was just unrealistic.

Now, with the consumer mandate still out there, does this shift an economic burden to uninsured workers or consumers for a year? Or just expand our deficit further? Both? Probably both.

The benefits of ObamaCare, such as insuring all, even those with pre-existing conditions, still are on track for January of 2014. Exchanges are planning on being launched on or before January 2015. Most of the act, so far, is in motion. Our clientele still fears government becoming larger in many areas, including healthcare. Our clientele still fears an ever-expanding deficit. Our clientele is also happy that this provision is getting delayed so that they will have more time to plan and make wiser choices given the new uncertainty and changes being brought in by the act.

Newtek Lending a Hand in Sandy Recovery

At Newtek, The Small Business Authority, we just announced several special programs to help small businesses devastated by Hurricane Sandy. Newtek Chairman and CEO Barry Sloane says, “We are here to help small businesses and even moreso, any individuals affected by Hurricane Sandy’s devastation. Newtek, “The Small Business Authority” helps independent business owners in good times and bad, both our clients as well as others. We are a business located in both Manhattan and Long Island and clearly understand the problems these local businesses face. We are here every day, around-the-clock to help with all major causes of concern for small businesses.”

Mr. Sloane offers, “All it takes is a phone call to the 1-855-2-THESBA phone line for help with:

* SBA Disaster Loan Funding

Examining Insurance Policies for wind, flood, and business interruption coverage.

Data Back-up Planning

Cloud Computing Solutions for immediate cost-savings and future disaster protection.

Additionally, it is important to know that The United States has declared several states (and many counties within them) Federal disaster areas. These include areas within Connecticut, Delaware, District of Columbia, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia, and West Virginia.

Newtek understands both individuals as well as small business leaders have myriad assistance questions. Answers may be found at FEMA, U.S. Department of Homeland Security’s Website. Assistance can include grants for temporary housing, home repairs, and other programs to help individuals and business owners recover from the Hurricane Sandy disaster. Moreover, this site also provides helpful programs for medical and other serious disaster-related needs not covered by insurance.

U.S. Small Business Administration (SBA) Disaster Loans are available for businesses located in affected counties and States which include loans up to $2MM for certain property losses and/or fiscal damage.

Business owners’ first step should be to register the affected business by calling 1-800-621-FEMA(3362) or by Internet at www.disasterassistance.gov.

Remember that you can call any time, 24/7/365 at 1-855-2-THESBA or, visit us online at www.thesba.com.

 

Is Workplace Drug Testing Really the Best Thing for Your Business?

Is Workplace Drug Testing Really the Best Thing for Your Business?

Is Workplace Drug Testing Really the Best Thing for Your Business?

Personal accountability is especially important in a small business to meet deadlines, satisfy clients, control budgets, and produce positive results. With fewer employees to run day-to-day operations, small-business owners rely even more on individual contributions than do larger corporations.

A small-business owner has two choices to ensure his company employs personally accountable and law-abiding individuals: (1) a system based on trust, or (2) a system based on test results.

Surprisingly, however, a system based on trust yields higher productivity and employee morale than one based on testing. Take, for example, drug testing in the workplace.

More than half of employers in the United States (57 percent) still conduct drug tests on job candidates, and many employers (36 percent) continue to conduct periodic drug tests on current employees, according to 2011 research by the Society for Human Resource Management1.

Because drug testing costs as much as $50 per candidate, small-business owners (99 or fewer employees) are less likely to conduct drug tests (39 percent) compared with owners of businesses employing 2,500 or more employees (71 percent), according to the same research.

However, in a study of 63 high-tech firms in the computer-equipment and data-processing industry, drug testing was found to reduce rather than enhance productivity, according to a report by the ACLU2. Firms with pre-employment drug testing scored 16 percent lower on productivity measures than firms with no drug testing in the workplace at all, according to the ACLU report.

Here are three more reasons to reconsider drug testing in the workplace:

  • Drug testing is expensive. According to an ACLU study, the federal government spent $11.7 million to find 153 drug users among almost 29,000 employees tested in 1990 – a cost of $77,000 per positive test2.
  • Drug testing is not completely accurate, as it is not a pure science. There is a chance that an employee will receive a false positive. This unfairly destroys the rapport between an employee – falsely accused of using drugs – and an employer – forever biased by the inaccurate results.
  • Drug testing does not catch drug users. Drug testing, especially when conducted exclusively during the hiring stages, doesn’t guarantee that you’ll identify a drug user.

“The vast majority [of workers who use drugs] undergo examinations only when they apply for a job, and they can pass by abstaining from drugs for a reasonable period before the test – or by using a variety of masking agents or devices that make their urine seem clean,” Reynolds Holding wrote for Time3.

If you want to improve productivity and decrease absenteeism in your workplace, you have other methods available for encouraging personal accountability at your company, including:

  • Encourage participation in substance abuse programs. Medical insurance often covers counseling and substance abuse programs. If you suspect that an employee has a problem with drugs or alcohol, promote a substance abuse program at the office. Small businesses are more like families. As such, raising awareness for insurance-covered counseling kindly allows employees to address issues confidentially and quietly, and it shows that your company supports healthy recovery and doesn’t just issue reprimands.
  • Conduct comprehensive reference checks. Instead of testing candidates for drugs, try conducting more comprehensive reference checks on your employees. Ask for three professional and three personal references.
  • Prepare a list of questions in advance that ask previous employers and personal references to honestly evaluate a candidate’s sense of personal accountability. (Of course, check with a lawyer ahead of time to ensure that you’re not violating any workplace discrimination laws.) Reference checks done correctly will identify more areas for potential problems or conflict than will a drug test.
  • Hire outside consultants to improve workplace efficiency. If there is a decrease in productivity at your business, it may have nothing to do with your employees at all. Hire an outside consultant to analyze your operations and bookkeeping.

Implementing more efficient workplace systems may be just what your business needs – as opposed to promoting a culture of mistrust – to increase morale, efficiency, and company profits.

For more information, visit:

1. Society for Human Resource Management: “SHRM Poll: Drug Testing Efficacy

2. American Civil Liberties Union: “Drug Testing: A Bad Investment

3. Time: “Whatever Happened to Drug Testing?”

Business Owners Need Protection

The Small Business Authority

Two major forms of insurance for businesses are Directors & Officers (D&O) insurance and Professional Liability (Errors & Omissions) insurance. Both types of policies protect businesses and business owners but in different capacities.
1. D&O insurance applies to the directors and officers of public companies who can be held liable for their decisions. Lawsuits may come from a number of sources, including: employees, shareholders, investors, competitors, suppliers, customers, and lenders. D&O policies provide directors and officers of a company financial protection if they are sued in conjunction with the performance of their duties with the company. D&O claims come in the form of alleged financial damage. As neither general liability nor professional liability policies provide such protection, a Directors and Officers Policy is the only back stop for this type of claim or suit.
D&O is available from a number of carriers, but we recommend you look for carriers/policies that that have the following.
A highly rated carrier with experience in D&O and a good record of claims handling.

  • Coverage for the entity and individual directors and officers
  • Coverage for punitive damages where insurable by law
  • A risk-management helpline (HR consultation)
  • Separate limits for management liability and EPLI
  • Reasonable rates and deductibles

2. E&O/Professional liability insurance is applicable to businesses that offer professional advice or render services. Clients may come forward with claims of negligence or claims that a company made an error or omission in a service it provided or failed to provide, for which the customers suffered a financial loss. E&O insurance protects professionals such as doctors, lawyers, dentists, and accountants as well as service providers such as consultants, home health-care providers, fitness trainers, beauticians, and many others. E&O insurance provides for defense and payment for these claims and helps companies avoid the full cost of potential lawsuits. For a small-business owner, professional liability insurance is extremely beneficial to consider and for many business classes can be combined with general liability, saving the business owner money and simplifying claims handling and billing.
This article originally appeared on Forbes.com.

6 ‘Benefits’ to Having Group Employee Benefits

More effective than a “free kittens” sign

As a small-business owner, you may be thinking about providing group employee benefits for your employees. There are many “benefits” (no pun intended) to providing this kind of service for your employees.
There are many different insurance companies with many different programs. Generally speaking, there are six types of benefits you should at least consider when selecting which to include in your package.

1. Health insurance: Health insurance protects against the risk of medical expenses. There are many health insurance companies with many different types of programs and options. It is best to do some research to see which insurance company is best for your company and employees’ needs. Two very popular insurance programs are HMOs and PPOs.

  • HMOs, or health maintenance organizations, provide managed care for insurance companies. HMOs cover the services of doctors who agree to treat patients under HMO guidelines. Under HMOs, individuals usually select a primary care physician and need to obtain referrals in order to see other doctors or specialists. These referrals are only given when the HMO plan deems the services necessary.
  • PPOs, or preferred provider organizations, are subscription-based, and employees can visit network doctors without going to primary care physicians for referrals. Doctors and hospitals work with insurance plans in order to provide care at reduced rates. Most PPO plans also allow employees to visit non-network doctors, but employees pay higher deductibles and/or copays.
  • High-deductible HSA plans are also gaining popularity. The premiums can be significantly lower than PPO premiums. HSA plans allow employees to set up qualifying bank accounts and make contributions from which they pay the expenses that fall within the deductible. The contributions to the HSA that are not used in the calendar year roll over to the next year.

2. Vision plans: These are usually offered as an addition to general health insurance plans, but they can be purchased standalone. Vision plans provide reimbursement for vision services. This insurance would be used when visiting optometrists or ophthalmologists for services such as eye exams, as well as for getting eyeglasses or contact lenses.

3. Dental coverage: Generally offered in addition to general health insurance plans, dental plans provide individuals with insurance for dental care. Dental plans vary, but generally speaking, they cover (partially or in total): basic cleanings, fillings, X-rays, periodontics, and endodontics. Some plans may even cover parts of oral surgery, crowns, implants, or dentures. Some carriers offer HMO and PPO dental options.

4. Group life: Life insurance can be purchased on the group with a set limit for the group or set limits by job/class. The coverage is term, reasonably priced, and available while individuals are employed by the company. While a Group Life program can be purchased standalone, most employers will combine as part of the overall benefits package.

5. 401(k) plans: 401(k) plans are a great way for employers and the owners to provide a vehicle to create a retirement income pool. Individuals contribute a percentage of pretax income into a qualified plan while they are working, and they receive funds from the plan upon their retirement. The investment income accumulates tax-free and the recipients pay income taxes as the funds are distributed, usually at a lower rate. Individuals can start withdrawals without penalty upon turning 59 ½. Many employers provide matching contributions based on a formula that may include company profitability.

6. Disability (short- and long-term): This type of insurance protects those who become disabled and are unable to work. Short-term disability insurance generally pays a percentage of a disabled employee’s salary for a certain amount of time after a waiting period of 7-14 days. Each state has different guidelines and rules regarding short-term disability; some states require benefits be provided for up to 26 weeks.

Long-term disability insurance is more popular among employers. If an employee is unable to work for a long period of time due to disability, this coverage will pay a part of the employee’s salary. The amount of money that an individual will receive often depends on his position and how much coverage his company provides. Many employers will provide both STD and LTD as complementary products.

This article originally appeared on Forbes.com.



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