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Archive for April, 2010

Independent Contractor Status:  The IRS estimates that 80% of workers classified as “independent contracts” are actually employees. 

As part of the crackdown, the Department of Labor has hired 100 new auditors solely to investigate misclassifications.  State investigators are also turning up the heat on employers.  And…..all this attention is leading more independent contractors, and their attorneys, to challenge their classifications in court.

The DOL is targeting employers with more audits and new scrutiny.

Jacquie Healy, CEO/President

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Although Clinton took care of pre-existing clause when transferring in-between plans, President Obama has made additional changes.  Beginning October 1, pre-existing condition exclusions for dependent children (under 19 years of age) are prohibited.

In January, 2014, guarantee issue will be required, and the pre-existing condition exclusions are prohibited for all.

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How does the new reform affect us?  We have only addressed immediate changes through 2013 at this time.  In 2014, 2016, and 2018 there will be several changes to discuss as time goes forward – Cadillac plan taxing, Exchange purchases, Penalty fees for not having insurance as an individual, annual limits will be prohibited, etc.

 In 2010

  • Dependent children will be allowed to stay on their parents’ insurance policies until their 26th birthday.  Currently, Colorado law for fully insured groups allows children to remain on their parent’s insurance until their 25th birthday.
  • Within 90 days after enactment, individuals with no insurance because of pre-existing conditions will have access to high-risk insurance pool.  Currently, Colorado has a high-risk pool for these individuals called CoverColorado (www.covercolorado.org).
  • Subsidies for small businesses to provide insurance benefits to employees.  Eligible small businesses (less than 25 full-time employees) with an average annual wage of less than $50,000 will receive a maximum credit, based on number of employees, of up to 50% of premiums for up to 2 years if the employer contributes at least 50% of the total premium cost.
  • Insurance carriers will not be allowed to deny coverage to children ages 19 and under with pre-existing conditions.
  • Lifetime limits on the dollar value of benefits for any employee or dependent are prohibited.
  • All individual and group plans will have to cover specific preventive care services with no cost-sharing.
  • Large employers (organizations with 50 or more employees) that pay for retiree drug coverage must declare for accounting purposes whether they intend to keep doing so.
  • Temporary reinsurance program for employers that provide retiree health coverage for employees over age 55.

 In 2011

  • Employers must include on W-2’s, the aggregate cost of employer-sponsored health benefits. 
  • The tax on distributions from a health savings account that are not used for qualified medical expenses increases from 10% to 20%.
  • Over the counter drugs will no longer be reimbursable under HSAs, medical FSAs, HRAs and Archer MSAs unless prescribed by a doctor.
  • All employers would be required to enroll employees in a new national public long-term care program, unless the employee opts out.

 

In 2013

  • New Medicare taxes on individuals earning more than $200,000 a year and couples filing jointly earning more than $250,000 a year.  Tax on wages rises to 2.35% from 1.45%. A new 3.8% tax on unearned income such as dividends and interest.
  • Beginning January 1, 2013, there will a cap of $2,500 cap for two years on health Flexible Spending Accounts offered under cafeteria plans.
  • Excise tax of 2.9% imposed on sale of medical devices.
  • For those taxpayers itemizing their federal income taxes, the threshold for deducting unreimbursed medical expenses will increase from 7.5% of adjusted gross income (AGI) to 10% of AGI.  The increase would be waived for those ages 65 and older through 2016.

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