Category Archives: News


New Healthcare Reform Mandate Delays

NEW-OBAMACARE-DELAYAs you have likely heard, the Healthcare Reform Act requires that all large employers (50 or more workers) provide insurance to their employees. And not unlike several other addendums, this mandate has been pushed back – again. The administration is basically scaling back completely for medium sized businesses and less so, but still significantly, for the largest. Here are the keys to understanding the changes:

  • Businesses with 50 to 99 employees receive what amounts to a full year’s pass. For these companies (which affects the business segment that employs around 7 percent of the entire workforce), they will not have to worry about the mandate until 2016.
  • Business who employ 100+ workers no longer have to cover 95 percent of employees, as the new addendum say only 70 percent. Of course, like the aforementioned addendum, this only holds true until 2016 when it will revert back to the original policy of 95 percent. Incidentally, this directly affects businesses that account for the employment of 66 percent of today’s total workforce.
  • Volunteers (like volunteer firefighters) will NOT count as employees inasmuch as health care is concerned. This effort was to eliminate considerations to remove such volunteer positions.

 

While in another world, such mandate delays could have political ramifications. However, when it comes to the Healthcare Reform Act, one of the most polarizing topics in the national spotlight, most have already taken their position so this latest maneuver is not likely to move the needle. And as far as what it means for those covered, numbers show that the delay will likely amount to a relatively small, if not completely insignificant change.

Newtek CEO Featured in Daily News Article

Barry-SloaneCEO Barry Sloane of Newtek Business Services was quoted in the September 30, 2013 Daily News article “Your guide to Obamacare: Young entrepreneur sees value of New York’s insurance marketplace firsthand.

Mr. Sloane said, ”Although the exchanges are opening, and do provide another way for you to purchase insurance, they are not necessarily the best way to go. Look at the pricing, network size, and the administration costs to make sure that you are making the best decision.”

Click here to read the article in its entirety.

Individual Mandate Clarifications For Small Business

Health-care-reform5The IRS has finally taken one more step to clarify what will constitute the Individual Mandate provision of the Affordable Care Act. The mandate, which requires all Americans to obtain health insurance, had gone mostly undefined until now. As we approach the 30 day mark to the opening of the “online marketplace” also known as exchanges and the 100 day mark of Obamacare Implementation, American consumers and small businesses now have a clearer picture as to what will be required on January 1, 2014.

  1. First, the penalty has been “remarketed” as a shared responsibility payment. This still requires those that do not qualify for an exemption or tax subsidies based on income, to obtain health insurance that meets minimum essential coverage.
  2. “Minimum essential coverage” is broadens the definition of employer sponsored plans to include multiemployer plans, single employer collectively bargained plans, plans sponsored by third parties such as professional employer organizations, temporary staffing agency, etc.
  3. One of the big coverages that were not identified in the ruling by the IRS is how some funding arrangements will be considered. Standalone Health Reimbursement Accounts, which are a common funding option to allow employees to purchase their own health insurance in the open market, have not yet been addressed.
  4. Penalty exemptions have also been clarified to in an effort to make it easier for lower income individuals to understand how the subsidies work, and what is needed to claim them. Some changes include:
    • A taxpayer is not required to file a federal income tax return solely to claim the exemption, and may apply for exemption via the Exchange/Marketplace
    • Individuals who have a gap in minimum essential coverage of less than three consecutive months in a calendar year, with the continuous period beginning no earlier than January 1, 2014
  5. How will the penalties be paid? – Penalties are to be paid to the IRS through the filing of tax returns starting in 2015. A penalty is the greater of either a specified dollar amount or percentage of income. The annual penalties for 2014 through 2016 are noted below. Beginning in 2017, penalties will increase based on the cost of living.
    • 2014: Greater of $95 per adult and $47.50 per child under age 18, maximum of $285 per family, or 1% of income over the tax-filing threshold
    • 2015: Greater of $325 per adult and $162.50 per child under age 18, maximum of $975 per family, or 2% over the tax-filing threshold
    • 2016: Greater of $695 per adult and $347.50 per child under age 18, maximum of $2,085 per family, or 2.5% over the tax-filing threshold

Most Recent Obamacare Implementation Delay, Also Most Pronounced

Medical-money-300x225No matter which side of the aisle you most closely connect, the assumption by the vast majority of both Democrats and Republicans must have included the recognition that overhauling a system (health care insurance) that was so engrained into the fabric of our country … would indubitably require a complicated and lengthy transition – one that would never be referred to as “seamless.”

And so it seems  the Healthcare Reform Act is suffering yet another setback. Unfortunately, this one extends beyond the realm of a mere temporal delay. Rather, it has the potential to bring extraordinary fiscal strain and pain to many individual consumers. Again, I am sure this is something that both parties would have preferred to avoid.

Just last week, it was revealed that a legal/policy implementation (that would otherwise have protected consumers from exorbitant out of pocket costs) has been delayed until 2015.

These out-of-pocket cost limits (said to include both deductibles and co-payments) were originally conceived so as not to exceed $6,350 for an individual or $12,700 for a family. However, federal officials have allowed some insurers a one-year grace period before the policy is implemented. What that means is, for 2014, they will be able to set higher limits, or even remove them altogether, for some costs. Probably not the way lawmakers had conceived of this from the get go. But, again, no one expected “seamless.”

For the record, the Labor Department’s website alluded to the grace period as far back as February, albeit it was offered with substantial industry and legal jargon. Suffice it to say, the grace period generally went unnoticed for the most part – until now. Again, this is a megalithic reform so continued hiccups are to be expected. In fact, we should be stunned if this were to be the last.

So, what does this hiccup actually mean to consumers?

Well, myriad group health plans will be able to divide the limits set above. So, a consumer could very realistically pay the $6,350 for doctor, hospital visits, and services and then conceivably still have to shell out another $6,350 for prescriptions administered through a pharmacy benefit manager. And, there are some that may be obligated to pay even more than the aforementioned totals as it seem that some group healthcare plans are beholden to zero limits on their patients’ out-of-pocket drug costs for next year. In short, if they do not have one now, they will not impose one for 2014.

While the President specifically set an immovable overall limit when it was first voted in, it seems the insurers are unable to comply quite yet. Why? They literally are incapable of leveraging their current technology to operate the new parameters quickly enough. Most providers go through one company to administer their major medical and another for drug benefits – each with separate out-of-pocket limits. Not surprisingly, these disparate companies have completely different computer systems and as a result, an egregious inability to communicate.

Again, this is not an indictment on the motivations of policy makers, it is just the natural ebb and flow of indoctrinating new policy. Hopefully the next problem area is more of the “delay, please exercise patience” variety, than it resembles the most recent “hitting the consumer in the pocket” example. One thing is for certain, it’s going to take just a bit more time before we get an idea of what this entire implementation will actually feel like when complete.

SHOP Delayed (and What That Means to Individuals and SMBs)

business-health-care-delayTo be clear, SHOP, or the Small Business Health Care Options Program, is a piece of the Health Reform Act (in addition to HIX which are the Health Insurance Exchanges for individuals) that has been delayed. Specifically, SHOP is an insurance exchange that is intended to provide small businesses a range of choices.

So what does the postponing SHOP do in the meantime? Well, it seems that businesses that fit into this category now have but one viable plan, contrary to what was promised, at least for the time being.

Why the delay?

Neil Trauntwein, an employee-benefits lawyer for the National Retail Federation, says the delays have at least allowed business leaders to return to Capitol Hill to discuss such issues as whether the cutoff for the employer mandate should be less than 50 full-time employees and if a 30-hour week is the best definition of a full-time worker.

It is important to note that this one-year delay will impact the 33 states that are using federally facilitated or partnership SHOP Exchanges. There are 17 states that are implementing state-based SHOP Exchanges that have the option to choose between limiting a small group employer to one benefit plan choice for its employees or could allow the employees of a small group to choose among several Qualified Health Plans in 2014. For list of which states have state SHOP Exchanges, the information is posted on the federal government’s health care reform website. Certainly the endgame is uncertain when it comes to SHOP, however, we still must prepare for the rest of Healthcare Reform.

In the meantime, there are other aspects of the Healthcare Reform Act that remain on schedule and are seemingly ramping up. Currently, state and federal officials are racing to set up new online health insurance exchanges, where lower-to-moderate income families that lack health insurance will be able to sign up for federally subsidized coverage beginning on October 1. The poor will also be able to sign up for Medicaid coverage in 23 states that have opted to expand the program.

Additionally, most large employers already offer health insurance and CBO (Congressional Budget Office) said few are expected to drop coverage because of the delay. Nevertheless, it seems the SHOP delay will have its effects by NOT being available.

For example, the change will result in a $10 billion reduction in penalty payments that some employers would have made in 2015 for failing to provide coverage next year, estimates the CBO. They also predict it means another $3 billion in added costs for exchange subsidies.

Why?

Basically, it is because about half of the 1 million workers who would have gained employer-sponsored coverage next year will now obtain insurance through the exchanges or via public programs including Medicaid.

It should be pointed out that an increase in in taxable compensation (resultant of fewer people enrolling in employment-based coverage) would offset those factors by about a third.

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.

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.

 

Business Owners Speak About Health Care Law

Business Owners Discuss Health Care

In January 2011, the U.S. House of Representatives passed HR 2, the “Repealing the Job-Killing Health Care Law Act.” The goal of HR 2, which passed 245-189, is to repeal the Patient Protection and Affordable Care Act as well as the health-care aspects of the Health Care and Education and Reconciliation Act. As reported on C-SPAN, the vote was considered symbolic.

In January 2011, Sen. Jim DeMint, R-S.C., introduced legislation that would repeal the health care law. It was read twice and put on the Senate legislative calendar. In February 2011, Senate Republican Leader Mitch McConnell, R-Ky., tacked onto an aviation bill an amendment that would have repealed the health care law. The Senate voted down the amendment 51-47.

The Small Business Authority spoke with small-business owners about the health care law and how it will affect them. Here are five viewpoints.

Expecting Lower Costs
Daniel G. Hacker, owner of Hacker Jewelers, Designers & Goldsmiths Inc. in Tecumseh, Michigan, believes that the reform will actually reduce his costs.
“We have met every year with our insurance representatives for the last 20 years or so,” Hacker wrote in an email. “This annual meeting consists of deciding how much more we will pay for how much less insurance coverage. We have to ask ourselves, ‘What can we live without, and what do we have to have and face the fact that we need to find the extra money for?’”

Hacker also believes that “the added tax credit looks like it will significantly reduce the costs for providing these benefits for my employees.”

That said, he does feel that small business needs relief from one section of the health care reform law: the provision that companies file a Form 1099 on any corporate or non-corporate entity doing business with them, once the pay exceeds $600. The law already had companies collecting 1099s on non-corporate providers of goods or services.

Hacker wrote that this provision “will inundate a small business like the one my wife and I run with new paperwork.”

Lawmakers are making various efforts to repeal the health care law’s requirement that business owners file 1099 forms. In February, the Senate voted to remove the requirement. According to the House Committee on Ways and Means press office, the House has not yet dealt with the Senate’s amendment.
Additionally, the Committee on Ways and Means approved in February two legislative pieces that deal with repealing the requirement: HR 4 and HR 705. The House passed HR 4 on March 3.
Sen. Mike Johanns (R-Neb.) also recently introduced a bill similar to HR 705.

Adding Labels Will Add 14 Million Hours
In the interest of making Americans healthier, the law requires some small businesses to comply with new requirements. Some people estimate that it will increase costs.

The National Automatic Merchandising Association (NAMA), headquartered in Chicago, represents the vending machine industry, which for the first time must list nutrition facts in close proximity to each article of food or the button you press to select it, if that information is not easily visible on the product.
Section 4205 of the health care law sets the following standard for vending machine operators: “In general—in the case of an article of food sold from a vending machine that (aa) does not permit a prospective purchaser to examine the nutrition facts panel before purchasing the article or does not otherwise provide visible nutrition information at the point of purchase; and (bb) is operated by a person who is engaged in the business of owning or operating 20 or more vending machines; the vending machine operator shall provide a sign in close proximity to each article of food or the selection button that includes a clear and conspicuous statement disclosing the number of calories contained in the article.”
The Food and Drug Administration estimates that compliance will cost vending companies 14 million hours per year.
NAMA said that there is no way to estimate actual costs as the rules are still being formulated.

The FDA has to create regulations to implement the law by March 2011. The FDA is currently taking comments for the regulations.
Ned Monroe, 
senior vice president of government affairs 
for NAMA, said 
the organization submitted a comment to the FDA on potential costs, stating, “Our preferred method of disclosure would be to post one menu with calorie counts of all foods which are stocked in a bank of vending machines.
“If this menu disclosure solution is accepted, then it would require significantly less than 14 million hours per year which the FDA is estimating.”

If the FDA does not back down on the requirement, said Monroe in an email, it would cost the small businesses that make up NAMA $40,000 a year.

‘I Can Compete’
Richard Hayman, president and CEO of Maryland-based Just Moulding, wrote in an email:

“Politicians know nothing about small business. Whatever our expenses are, we simply raise our prices to cover them. In the end, the customer/consumer always pays. From my perspective, as long as my competitors are required to play by the same rules I am, the playing field is level and fair. I can compete. Quality health care is a right, not a privilege, in my book. … Congress would like the public to believe that the cost is coming out of the owner’s pocket, and that’s very misleading. What Congress wants the public to believe is that businesses pay taxes on gross revenue. Our taxes are computed on net profit after all expenses. Quite a difference.”

Won’t Hire
Chuck Blakeman, a Denver-based author, speaker, and founder of the
 Crankset Group, agrees with those who say the health care law will kill jobs. He has six full-time and three part-time employees, and he had planned to hire two more people in the coming three months.
“Our health care costs went up 22 percent in September and our provider said it was a direct result of the health care legislation,” he wrote in an email. “They said it will go up another 10-15 percent in February or March of this year. It was already expensive, and is now prohibitive. We either won’t hire or won’t offer health care going forward.”

Blakeman equates the rise in health care costs for his employees to a tax increase, but commented, “Our taxes going up 100 percent wouldn’t have created as much cost as this legislation already has.”

Sees Positive Impact
Ben Coleman’s company, OrigamiBonsai.org, does business internationally. He believes that health care reform will make U.S. businesses more competitive in international markets. He explained, “The Small Business Health Care Tax Credit, part of health care reform, will give small businesses what is, in effect, the same rates as big businesses. The bill for health insurance will come down for small businesses. That means we can quote lower prices to our customers, which in turn means we’ll win more bids, both nationally and internationally.”

In an email, he wrote that he believes “health care reform will positively impact the bottom line, making smaller businesses more profitable than ever before.”

“Specifically in my business, health care reform will add durability,” Coleman wrote. His is a one-man operation, and he is uninsured because his insurer dropped him after two operations in 2008, and other insurers have been unwilling to pick him up.
“If I have another health disaster, I will have to tap my business for cash to pay the bills, and my business will die in bankruptcy court,” he wrote. “The only people who aren’t for health care reform are people who don’t understand it.”

What Is Employment Practices Liability Insurance?

What is EPLI insurance?

What is EPLI insurance?

If you find that your one-man operation is about to become a fully staffed organization, you may need to protect your business with employment practices liability insurance (EPLI).

Companies can be sued for a myriad of reason these days, including lawsuits from past, current, and even potential employees. EPLI can minimize your risk in these instances.

EPLI is a relatively new liability insurance line, but serves a critical purpose. EPLI’s coverage insures you for the following:

• Discrimination based on age, sex, race, disability, etc.
• Wrongful termination
• Sexual harassment
• Breach of employment contract
• Negligent evaluation
• Failure to employ or promote
• Wrongful discipline
• Deprivation of career opportunity
• Wrongful infliction of emotional distress
• Mismanagement of employee benefit plan

With employment-related lawsuits on the rise, some estimates show that up to three out of five business will be sued by employees. As such, business owners need to ensure that they are taking all the appropriate steps to protect their companies.



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