There is something new on the horizon and 105 Concepts is once again on the leading edge and wants PAAK members to be aware and stay ahead of their competition. Here’s what is happening in the employee benefit marketplace:
As states try to expand the number of workers with health insurance, they are requiring businesses to implement “cafeteria” plans, which let employees get more bang for their buck by paying for health coverage with pretax dollars.
Cafeteria plans are administrative arrangements under which workers can have a portion of their pay set aside before taxes to pay for qualified benefits, like health insurance, or to contribute to a flexible spending account (FSA) or health savings account (HSA).
A cafeteria plan requirement was just one part of Massachusetts’ ambitious Health Care Reform package. In the past several months, three other states have taken a cafeteria plan requirement and enacted it separately. Fifteen new states are considering this mandate and it’s predicted by the year 2013 all fifty states will have enacted legislation addressing this issue. The Massachusetts Health Connector, the agency set up to implement the state’s health insurance reforms, estimates that on the average, Massachusetts workers who buy health insurance with pretax dollars save about 41%.
Now you may be saying, “How or why does this affect me?
#1. Although there are costs involved in setting up administrative frame work for a cafeteria plan, companies will see offsetting savings because employees’ use of pretax dollars to pay for health coverage reduces their total taxable income, which in turn reduces companies’ payroll taxes. 105 Concepts will take care of setting up the administrative frame work and you work with your clients on the tax planning.
#2. 105 Concepts has created a new feature to their Plan Administration Center. It’s a totally web-based Premium Only Plan (POP) which allows your clients to not only pre-tax their health insurance premiums but also provides you and your clients with instant documentation. Your clients will be coming to you for answers so it’s important for you to give them the resources they need to get their full benefits.
The most critical thing to remember is that cafeteria plans have been around for a long time but this is the first time that states are “mandating” POP plans. We encourage you to take advantage of this wonderful offer and create an additional profit center for your own practice. This is a choice opportunity for you become acquainted with this service and be on the forefront of a competitive advantage.
While over 45 million Americans lacked health insurance last year, the rate of uninsured continues to increase. Due to its broad scope and complexity, the lack of health insurance in America does not have a quick fix. However, addressing the problem of the uninsured has brought Premium Only Plans to the forefront to increase coverage and access for many Americans.
We encourage you to take advantage of this great offer exclusive to our members.
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