A newsletter from one of our affiliates, which we co-authored:
HR Tips & Tools
Only a few days left of summer and then it’s time to gear up for the remainder of the year. If you are local in Arizona we can’t think of a better action plan than to apply to be a participant in our brand new Leadership Power Groups program. Our introductory session is September 8th!
Leadership Power GroupsA Community of Practice for Emerging Leaders
Also happening as of September 23rd, are the first of Obama’s health insurance reforms. You will want to make sure you scroll down to see an overview of the Small Business Tax Credit.
And to keep you on your toes with the healthcare reforms – take our quiz to find out how up to date you are on “grandfathered” medical plans!
Here’s is a listing with links to each article:
MJMS’ Leadership Power Groups
MJMS Tip For Today
Monthly Quiz – Grandfathered Medical Plans
Tax Credit For Small Employers Under the Healthcare Bill
Our Introductory Session Is Sept. 8th!
Marshall Goldsmith wrote an entire book titled, “What Got You Here, Won’t Get You There.” His premise is that there may very well be something standing between you and the next level of achievement and it is up to you to identify the barrier. The barrier may well be the old habits of waiting for the phone to ring, waiting for the next new customer to come into the store, not showing genuine appreciation to current customers, etc., etc., In other words, the old way of doing business—the things that “got you here.” So, how do you get to “there?”
You know the rules for doing business have changed and they aren’t going back to “business as usual.” Where do you find the tools, processes and passion to survive and thrive for years to come? Our Leadership Power Groups will help you find the answers. In 10 sessions over a period of less than 1 year, we will explore, examine and adapt to this new way of doing business.
The best time to change is NOW – Don’t wait for the “recession” to end – if you do, you will be left far behind. If you or someone you know is interested in learning how to thrive in the “New Reality,” go to our website for more information: www.leadershippowergroups.com. Our introductory session takes place September 8! You don’t want to miss this opportunity.
Tip For Today!
“The best leaders are those that lead by example and are both team followers as well as team leaders. We believe that in general, the best ideas and decisions are made from the bottom up, meaning by those on the front lines that are closest to the issues and/or the customers. The role of the manager is to remove obstacles and enable his/her direct reports to succeed. This means the best leaders are servant-leaders. They serve those they lead.”
Source: “Delivering Happiness: A Path to Profits, Passion, and Purpose” by Tony Hsieh, CEO, Zappos.com, Inc.
And our quiz
According to the new regulations on grandfathered healthcare plans, there are several actions that could result in a loss of grandfathered plan status.
Which of the following actions would NOT result in the loss of grandfathered status?
A ) Raising co-insurance charges.
B ) Adding or tightening an annual limit on what the insurer pays.
C ) Cost adjustments due to medical inflation,
D ) Changing insurance companies.
ANSWER IS FOUND AT THE END OF OUR FEATURE ARTICLE
Now on to our feature article … The Small Business Tax Credit under Obama’s Healthcare Bill.
Tax Credit For Small Employers
Under the Healthcare Bill
Small Business Tax Credit:
A provision of the Patient Protection and Affordable Care Act (PPACA) of 2010
Beginning in the 2010 tax year, some small businesses may be eligible for a tax credit for payment of health insurance premiums. This tax credit is designed to encourage these businesses to offer or continue to offer health insurance to their employees.
Questions and answers providing information on the credit as it applies for 2010-2013, including information on transition relief for 2010 can be found athttp://www.irs.gov/newsroom/article/0,,id=220839,00.html
The tax credit will generally be available to eligible small businesses that:
1. Pay at least half the cost of coverage for their employees
2. Employ fewer than 25 full-time equivalent employees (FTEs)
3. Pay wages averaging less than $50,000 per year per FTE.
Employers can claim the full credit amount if they have 10 or fewer FTEs and the employer’s average taxable wages for FTEs are $25,000 or less.
The credit is phased out as the number of FTEs increases from 10 to 25 and as average employee compensation increases from $25,000 to $50,000. Any unused credit amounts may be carried forward to subsequent tax years.
In each of the four years 2010 through 2013, the full credit can cover up to 35% of premiums paid by qualified for-profit employers for health insurance (25% for eligible tax-exempt organizations). In 2014, the tax credit will increase to 50% of premiums paid by eligible for-profit employers (35% for tax-exempt organizations).
A business, however, cannot receive the tax credit for self-employed individuals or small business owners and their family members.
Employers should consult their tax advisor for detailed information on how to claim these credits.
For more information please see IRC Section 45R – Tax Credit for Employee Health Insurance Expenses of Small Employers Notice 2010-44 http://www.irs.gov/pub/irs-drop/n-10-44.pdf
For a comprehensive review of your current health insurance plan, or for more information on how this impacts your business, please contact LaChelle Woods – LaChelle is licensed in CA, NV and AZ and is very knowledgeable in this area:
Premier Benefits Agency, LLC
Non-Profit Organizations: Another provision in the legislation provides for a tax credit for non profit organizations. The same basic rules apply as for small businesses, but the credit is 25 percent (25%) now and in 2014 changes to 50 percent (50%). It is not clear how non-profits qualify for the credit, but the regulations are scheduled to be released shortly. If you are not a non-profit organization, you may volunteer in one or provide services to non profit organizations. You would be doing them a service to advise them of this credit if they are not already aware.
Answers to the quiz: C is correct – Cost adjustments due to medical inflation
Regulations provide that a plan to maintain status as a grandfathered health plan, a plan or health insurance coverage must include a statement, in any plan materials provided to a participant or beneficiary describing the benefits provided under the plan or health insurance coverage, that the plan or coverage believes it is a grandfathered health plan and must provide contact information for questions and complaints.
Regulations also provide that a group health plan or health insurance coverage no longer will be considered a grandfathered health plan if a plan sponsor (the business or company):
– Significantly cuts or reduces benefits.
– Raises coinsurance charges.
– Significantly raises copayment charges.
– Significantly raises deductibles.
– Significantly lowers employer contributions.
– Adds or tightens an annual limit.
– Changes insurance companies.
Increases in fixed-amount cost-sharing requirements.
Fixed-amount cost-sharing requirements include, for example, a $500 deductible, a $30 copayment, or a $2,500 out-of-pocket limit. For fixed-amount cost-sharing requirements other than copayments, a plan ceases to be a grandfathered health plan if there is an increase, since March 23, 2010, that is greater than the maximum percentage increase. The maximum percentage increase is defined as medical inflation (from March 23, 2010) plus 15 percentage points. For this purpose, medical inflation is defined by reference to the overall medical care component of the Consumer Price Index for All Urban Consumers, unadjusted (CPI), published by the Department of Labor.
For fixed-amount copayments, a plan ceases to be a grandfathered health plan if there is an increase since March 23, 2010, in the copayment that exceeds the greater of (A) the maximum percentage increase or (B) $5.00 increased by medical inflation.
Source: BLR®—Business & Legal Resources
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ABOUT MJMS, INC.
President and Principal Consultant: Margaret Jacoby, SPHR
Margaret Jacoby has more than 25 years of Human Resources and professional management experience in a variety of industries. She has designed human resources infrastructure and implemented systems to ensure compliance with state and federal employment laws. She has directed high quality human resources functions for small and emerging businesses, and served as an external consultant to a wide range of erse organizations, including non-profits.
Her work has included:
· Conducting H.R. Needs Assessments
· Drafting employee handbooks and policy manuals
· Conducting job analysis and developing position descriptions
· Conducting on-site compliance audits
· Counseling management on progressive discipline
· Drafting and review of employee disciplinary actions
· Providing mediation in employee/employee conflict
· Training employees/supervisors/managers in the implementation of human resources systems and policies such as Sexual Harassment
· Conducting workshops for business owners on H.R. compliance issues.
Ms. Jacoby has earned the nationally-recognized certification of Senior Professional in Human Resources (SPHR) from the HR Certification Institute, Society for Human Resource Management (SHRM).
Ms. Jacoby’s professional affiliations include:
· Professionals in Human Resources Association (PIHRA)
· Society for Human Resource Management (SHRM)
· National Association of Women Business Owners (NAWBO), Los Angeles and Phoenix
· California Chamber of Commerce
· Arizona Small Business Association (ASBA)
· Long Beach Community Business Network (LBCBN)
· Institute for Management Consultants (IMC)
The information contained in this newsletter is provided as general information and is not a substitute for legal or professional advice. The information is provided by MJ Management Solutions, Inc. and while we endeavor to keep the information up-to-date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the newsletter or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.