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How to save $1,000 in health premiums over the next 4 months

This isn’t a strategy for everyone. If you feel bad for the insurance companies, you can stop reading now. And if you have any significant health issues, this won’t work for you, either. But, if you:

  • Have had minimum essential coverage from January 1 through October 31 of this year
  • Are healthy, with no (or minimal) foreseen health expenses for the next few months
  • Are willing to take a few minutes to understand the rules and exceptions around:
    • Open enrollment
    • Guarantee-issue health insurance
    • Individual mandate to purchase minimum essential coverage
  • Would prefer to pay the lowest possible health premium, without subjecting yourself to financial risk or tax penalty

…then this could be for you.

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Small business heath care tax credit: a mirage?

One of the provisions of the Patient Protection and Affordable Care Act (PPACA) initially looked like it could be a huge boon to small businesses: a tax credit for dollars spent on employee health care.  Kaiser Health News has a very good summary of the tax credit, here.

We wrote about this back in April; six months later, as we talk to clients throughout the Bay Area and California, most small businesses do not qualify.  We attribute this primarily to the high cost of living in California’s urban areas, and because the tax credit phases out based on two criteria: number of employees over 10, and average salary over $25,000 annually.  Combine those two and we are finding that our clients either do not qualify at all, or the credit is so small so as not to be worth the effort of applying for it.

A factor that often gets missed is that the average salary criterion is measured by FTE – Full Time Equivalent, not just average annual salary.  So, your 30-hour/week, $40,000/year employee in fact does not fall within the threshold.

Still, there are a few small businesses that may qualify, so we encourage you to use the easy online calculator from the Small Business Majority.  Please contact us if you aren’t sure if you qualify.

IRS defers W-2 reporting of health care costs

The Patient Protection and Affordable Care Act (PPACA) initially was to require all employers to report the total cost of health care expenditures made on behalf of individual employees, on their 2011 W-2 forms.  This would be a new administrative requirement for employers, and will require some planning to accurately report the data in a timely manner.

Employee Benefit News reports that the IRS has deferred this requirement, making 2011 reporting optional.