Historically, employees of small businesses have enjoyed few options with regard to retirement planning. With only four out of ten small businesses offering any sort of retirement benefit, many Californians faced challenges with regard to their financial futures. Looking toward the future, and envisioning millions of citizens retiring at barely above the poverty line, lawmakers stepped in to create a state-operated retirement system.
CalSavers is now open for enrollment, with small businesses employing five or more workers required to enroll. Enrollment deadlines are staggered over the next two years, with the end goal of enrolling seven million Californians into a retirement savings plan (unless they take steps to opt out).
The set-up is relatively simple: CalSavers will provide an IRA (Individual Retirement Account) and eligible employees of participating businesses will be automatically enrolled at a 5 percent contribution rate. A one percent automatic escalation will apply, up to an 8 percent contribution rate. Accounts stay with employees even if they change jobs.
Business owners, also, can enroll in CalSavers if they are also employees of their businesses. Those who are not employees of their businesses can participate, but must make contributions from their bank accounts rather than payroll deductions. Self-employed workers are also eligible to join the program via the same process.
Are all business owners required to enroll in CalSavers? No, not necessarily. Enrollment in CalSavers is required of small businesses who employ more than five workers, but only if they do not already participate in a retirement benefits program. If you have already established a qualified retirement plan for employees, or decide to establish one through another provider, you will not be required to participate in CalSavers.
Otherwise, yes, small businesses will be required to enroll in CalSavers according to the following schedule:
Businesses with 100 or more employees should enroll by June 30, 2020
Businesses with 50 or more employees should enroll by June 30, 2021
Businesses with 5 or more employees should enroll by June 30, 2022
Of course, you can enroll earlier than those dates as well. Businesses that fail to comply with the mandate can be charged a penalty of 250 dollars per employee up to 90 days after the deadline, and 500 dollars per employee after 90 days have passed without compliance.
For more information on enrolling in CalSavers, or to discuss other retirement benefit options, give us a call. We can help you understand your options and select the course of action that best suits your needs.
You may have heard the alarming news reports regarding the coronavirus outbreak in China. Although this news is concerning, mostly for those in China, arming yourself with knowledge can be the best antidote for your own worry.
What is coronavirus? Coronavirus is actually an entire class of viruses, and they’re nothing new. In fact, coronaviruses are one of the frequent culprits behind the common cold.
Concern over this particular strain of coronavirus is due to its unusual strength, and the fact that it is a strain we haven’t previously encountered before.
What are the symptoms of coronavirus? Those infected with this new strain of coronavirus present with coughing, breathing difficulties, and fever. It might appear as a bad cold at first. However, the progression of the virus into respiratory distress and pneumonia is the true risk in this situation.
What is the treatment for coronavirus? As with other viruses, antibiotics are not effective. Antiviral drugs commonly used against the flu also will not work against coronavirus.
Treatment includes admission to the hospital, fluids, rest, and support for infected lungs. Recovery mostly depends upon the patient’s immune system.
How lethal is this coronavirus? As of February 7, the infection tally has reached 31,161 inside China, with an additional 280 cases in 28 other countries. The death toll includes 636 Chinese, one death of a Hong Kong resident, and one death in the Philippines. The mortality rate of the virus stands at 2 percent.
Most of the deaths have occurred in individuals with already compromised immune systems, the elderly, and people who are otherwise in poor health already.
Health experts have suggested that many cases of coronavirus have gone undetected because symptoms were mild, and the affected individuals assumed they simply contracted a common cold. In that case, the lethality of the virus would be even lower than the estimated 2 percent.
Are we at risk of infection in the US? So far, five cases of this particular coronavirus have been diagnosed in the United States. These patients recently traveled to China or had close contact with a traveler. So far the virus seems contained to these five patients, and health officials don’t believe it was spread within their communities.
With travel to China heavily discouraged at the moment, it is unlikely that we will see a widespread outbreak of this viral strain in the US.
Billing misunderstandings are common, due to the confusing nature of medical bills in general. But if you receive a bill that seems unexpected, it’s always a good idea to investigate it before paying it. In some cases you might have been billed erroneously.
One problem that we see occasionally is a situation called “balance billing”. This practice goes against your group insurance provider’s rules, and is actually illegal.
For example, let’s say a medical practice normally charges 300 dollars for a particular service. As an in-network provider with your insurance company, they have agreed to accept a pre-negotiated amount for that service, which is always less than the “cash” price. In this example, let’s assume that the pre-negotiated amount is $200.
If this practice then sends you a bill for the remaining 100 dollars, this is called “balance billing” and it not only violates their agreement with the insurance provider, but it is also illegal. Unfortunately, that fact hasn’t completely stopped some providers from engaging in this practice.
Any time you receive an unexpected bill, you have the right to question it before paying it. In some cases the bill is simply a mistake. The first thing to do is call the physician and inquire about the charges. Most often, the billing error is not intentional and the provider will fix the issue. However, if you believe your medical provider is engaging in balance billing and they refuse to adjust the charges, the next step would be to notify your health insurance company.
Of course, you also have the right to inquire about fees and insurance payments before scheduling an appointment with any doctor or healthcare provider. If you know what to expect, it can be easier to compare services and choose a provider that is right for you.
Many of us rely upon an annual physical exam, to detect developing health conditions and discuss prevention strategies with our doctors. But a lot can happen in a year’s time.
You might be surprised to know that your dentist or eye care professional can also detect several serious health conditions, even those that seem unrelated to your mouth or eyes. By staggering your check-ups throughout the year, you might stand a better chance at early detection of several chronic health problems.
For example, did you know that a routine eye exam can uncover signs of the following conditions? Each of these conditions produce changes that can be seen within the eyes.
- High blood pressure
- Thyroid disorders
- Several types of cancer
- High cholesterol
- Certain tumors
- Multiple sclerosis
- Sickle cell disease
- Early signs that you might be susceptible to a stroke
Your dental health can also indicate concerning symptoms of more serious underlying conditions. During a regular dental exam, your dentist might detect early progression of health problems such as…
- Pancreatic cancer
- Oral cancer
- Heart disease
- Kidney disease
- An oncoming heart attack
In fact, research has shown that over 90 percent of systemic diseases can include symptoms that manifest in your mouth! Your dentist might be the first to notice subtle signs of something going wrong. He or she won’t necessarily diagnose you with one of the above conditions, but will advise you to visit your primary care doctor immediately to conduct further investigation of a concerning oral health symptom.
If your health insurance does not offer coverage for dental and vision care, you can actually add a supplemental policy for this purpose. Contact us to learn more about dental and vision care coverage, and we can match you with a policy that suits your needs.
Although the Affordable Care Act resulted in healthcare coverage for the vast majority of Californians, a small percentage still are not enrolled in an insurance plan. Now, with the federal income tax penalty for coverage failure set at 0 dollars, some policymakers expressed concern that the number of uninsured California residents could grow.
With that fear in mind, the state has now instituted its own mandate. Those who remain uncovered by a health insurance policy in 2020 will be subject to a penalty, this time on their state tax return rather than federal.
The penalty will amount to $695 per uncovered adult in the household, and half of that amount for each uncovered child. The penalty goes into effect with regard to the 2020 tax year, with penalties charged in Spring of 2021 when California residents file their state income tax returns. Some exemptions to the law do apply.
In order to avoid the potential penalty, health insurance coverage must be maintained throughout 2020. That makes the current Open Enrollment season vitally important for all Californians.
If you are not currently enrolled in a health insurance plan, you must choose one by December 15 in order for coverage to begin on January 1, 2020. Get started today, so that you have time to adequately compare plans and select one that best suits your needs. Give us a call and we’ll be happy to help you protect your family, while avoiding any unnecessary tax penalties in 2021.
Many companies in the small group market want to offer health insurance coverage to employees, but are unsure of how to make that happen. What about the cost? Will employee participation be high enough? Will we get turned down if enough employees don’t want to participate? The small group special enrollment period is the answer to these questions.
What is the small group special enrollment period? Once per year, the small group special enrollment period allows smaller companies to establish a group health insurance plan for employees without the usual minimum participation or contribution rates. During this one-month enrollment period, your company does not need to contribute to premiums. And, you only need one enrolled employee in order to establish a group plan.
A tax-friendly strategy. As an added bonus, you can help your employees earn a valuable tax benefit as they pay their premiums. Premiums can be deducted from paychecks on a pre-tax basis, meaning they will reduce income tax liability by that amount each year. The strategy works in a manner similar to 401(k) contributions, adding a valuable benefit for your employees.
When is the small group special enrollment period? This opportunity comes around each November 15, and lasts until December 15. During the special enrollment period, the usual participation and contribution requirements are not enforced. Those who enroll by the deadline of December 15 will have coverage that begins on January 1.
Certain rules regarding employer contributions can feel a bit tricky to navigate. Contact us before November 15 so that we can answer your questions about the small group special enrollment period, and help you decide how to proceed with this important benefit for your employees.
For those who need to enroll in a new healthcare plan, or change from one plan to another, Open Enrollment is the time to complete those tasks. More to the point, unless special circumstances apply, you can only enroll in a plan or make changes during this time. Therefore it is extremely important to anticipate your Open Enrollment period, and be ready to complete the process during that window of time.
But wait! You might have noticed that there is more than one Open Enrollment period for health insurance. You will need to understand which enrollment window applies to your situation, and then complete the correct steps to select a health insurance plan.
Individual Open Enrollment. This enrollment period applies to the general health insurance marketplace for individuals – that is, people who are not covered by health insurance through their employers. In California you will complete your enrollment through Covered California, either online, over the phone, or with assistance from an independent health insurance broker.
This year, Open Enrollment for individuals runs from November 1 to December 15, 2019. Coverage under your new plan will begin on January 1, 2020.
Group Open Enrollment. Your initial enrollment period for group health insurance will occur at the time you become employed and eligible for that company’s healthcare plan. From that point on, Group Open Enrollment occurs annually upon the anniversary of the company’s enrollment in the plan. So, for example, if an employer originally enrolled in a group policy on October 1, 2015, their Open Enrollment period will occur on the first of October every year thereafter.
When you experience a change in your circumstances, allowing for a change to your plan (you get married or have a baby, for example), you can make that alteration to your plan at the time it occurs.
Contact your human resources department for more information on your group health insurance plan, or to make necessary changes to that policy.
Special Open Enrollment for Small Groups. The Affordable Care Act acknowledged that many smaller employers might want to offer a group health insurance plan, but do not meet standard employer contribution or employee participation ratios. For those cases, the Special Open Enrollment for Small Groups window exists, and will run from November 15 to December 15. Eligible small groups will receive coverage beginning January 1.
In the context of small group health insurance, an employer cannot require employees to enroll unless they cover 100 percent of the employee’s premiums.
Have more questions about Open Enrollment? Give us a call, and we will help you determine what you need to do next.
In the event that one of your employees is no longer employed by you, federal law might require that they are allowed to temporarily continue their health insurance plan. The Consolidated Omnibus Budget Reconciliation Act, or COBRA, asserts that former workers and their dependents are entitled to maintain group health insurance coverage for a period of time after their eligibility ends, if one of the following conditions apply:
- Job loss, whether voluntary or involuntary (except in cases of gross misconduct)
- Work hours are reduced and the employee otherwise loses eligibility for benefits
- A dependent is divorced or legally separated from an employee
- The employee becomes eligible for Medicare
- An employee’s child loses their dependent status
- An employee dies (in this case COBRA applies to their dependents)
Are you required to provide COBRA health insurance coverage? COBRA applies to private-sector employers, with twenty or more full-time employees (or full-time equivalents) in 50 percent of the calendar year, who provide group health insurance benefits.
However, COBRA coverage might not apply to all of your employees. You don’t have to provide COBRA to:
- Employees who haven’t worked for you long enough to be eligible for group health insurance benefits
- Those who declined to participate in a group benefits plan
- Those who are enrolled in Medicare
Even smaller employers should be aware of COBRA requirements. Your company could grow in the near future. Even if you employ just under 20 workers, become familiar with COBRA so that you can comply with the law when the time comes.
Employees must be notified. COBRA also requires that you notify workers of their COBRA rights within 90 days of their eligibility for your group plan. You must also notify them of COBRA eligibility within 14 days of a qualifying event (as listed above). The former employee, or dependent, has 60 days to opt into COBRA coverage.
COBRA applies to all health plans. If a former employee (or dependent) elects COBRA coverage, it must apply to all plans in which they were formally enrolled. Examples include medical flexible spending accounts, dental plans, vision plans, or drug plans.
COBRA is subject to certain time limits. For employees, COBRA coverage lasts up to 18 months. For dependents, coverage under COBRA can extend to 36 months after the qualifying event. Other rules apply in cases of disability.
Who pays for COBRA? The employer can require that the former employee or dependent pays 100 percent of the cost of coverage under the group plan. Premiums cannot exceed the full cost of coverage plus two percent for administrative expenses.
Noncompliance can cost you. Failure to comply with COBRA requirements can result in IRS fines, private lawsuits, and audit or enforcement actions by the Department of Labor.
If you have more questions about COBRA coverage, please don’t hesitate to call us. We can assess your responsibilities and help you maintain compliance with the law.
Now that the federal Individual Mandate requirement for health insurance has loosened – since setting the penalty at 0 dollars, the law is effectively nullified – individual states are now passing their own mandate laws. With passage of the Minimum Essential Coverage Individual Mandate, California is poised to join those ranks.
Effective January 1, 2020, the mandate requires all Californian residents (along with spouses and dependents) to enroll in a qualified insurance plan for each month of the year. Those who fail to maintain health insurance coverage will be subject to a Shared Responsibility Penalty , to be determined and collected by the Franchise Tax Board. Some exceptions to the law do apply, according to financial hardship and religious belief as dictated by Covered California.
Currently, 93 percent of the state’s population is covered by a health insurance plan. New affordability provisions within the law aim to close that gap, so that the state can achieve 100 percent coverage.
Currently, individuals and families with incomes between 100 and 400 percent of the federal poverty level can obtain government subsidies to make health insurance premiums more affordable. The new law will expand that bracket up to 600 percent, so that more Californians can obtain coverage.
The new legislation also raised Medi-Cal’s age cut-off for undocumented residents, from 18 to 26.
In the wake of the new law, we can expect to see a ripple effect upon other policies regarding health insurance. For example, the legislation also calls for additional reporting requirements under Internal Revenue Code 6055. “Applicable entities”,such as health insurance companies and companies which provide health insurance coverage, will be required to provide proof of coverage to the Franchise Tax Board each year. Penalties will be imposed upon companies that fail to complete their filings.
We will keep you updated on these changes as they occur. In the meantime, please don’t hesitate to contact us if you have questions about the new health insurance mandate law. We can assist both individuals and employers to ensure that you’re in compliance with the law.
We tend to think of Medicare as “healthcare for retirees”, due to the fact that we become eligible for coverage when we turn 65. But in reality, plenty of people are still working at age 65, and the trend toward later retirement is expected to continue (and even become more common).
So, if you’re still working and are covered by a group healthcare plan when you reach your 65’th birthday, you might be wondering what you’re supposed to do about Medicare.
Yes, you still need to enroll. When you turn 65, enroll in Medicare regardless of your employment situation. Assuming that you or your spouse have worked at least ten years, and paid taxes into Medicare, you are eligible for premium-free coverage under Medicare Part A. You might also want to enroll in Medicare Part B, or in Part D (prescription drug coverage).
Yes, you can have Medicare along with your other health insurance plan. If you already have health insurance coverage, you can still enroll in Medicare at 65. If your employer is a smaller company, Medicare will become your primary coverage and your group health plan will be secondary. In this case you definitely want Medicare Parts A and B, because it will be your primary coverage.
If you work for a large employer, that health insurance plan will remain primary, with Medicare serving as secondary coverage.
Either way, having group health insurance along with your Medicare could mean lower out-of-pocket costs for you.
You can delay Part B and Part D enrollment, if you prefer. Normally, failing to promptly enroll in Part B or D coverage at age 65 can result in paying a penalty when you finally do enroll. However, if you’re still working and are covered by your employer’s plan, you can delay this enrollment with a confirmation of creditable coverage from your employer. This way you can avoid the late enrollment penalties when you do enroll in those plans later.
You are responsible for remembering the deadline. You can enroll in Medicare beginning three months before your birth month, or for three months afterward. This is called your Initial Enrollment Period (IEP). Medicare will not remind you of your IEP unless you’re receiving Social Security or Railroad Retirement Board benefits, so mark this date on your calendar.
If you have questions about Medicare plans, or how enrollment works when you’re not yet retired, please give us a call. We can offer more detailed advice once we discuss your situation.