Important Notice Regarding Pre-Tax Health Insurance (Section 125)

Zane Benefits logoLast year, Zane Benefits introduced a pilot program utilizing the pre-tax health insurance concept (originally referred to as the “Pre-tax Premium Payment (PPP)” program). The PPP program provided the opportunity for employers to set up a Section 125 cafeteria plan that allowed employees to set aside a portion of their paycheck voluntarily. The money set aside would be used to pay for individual health insurance premiums using pre-tax dollars.

Recently, the Department of Labor issued guidance on the Affordable Care Act. The release included a discussion of Section 125 cafeteria plans and individual health insurance. As a result of this new federal guidance, Zane Benefits will no longer be promoting the pre-tax health insurance program.

Any DeWitt Risk Management groups who wish to continue to allow employees to take advantage of the section 125 cafeteria plan for individual health insurance premium, are encouraged to consult with their legal counsel.

We will continue to work with providers intent on exploring other affordable insurance options for employees of small employers that do not provide group health insurance.  Please get in touch with your group benefits specialist at DeWitt Risk Management with any questions or to discuss alternate options for your group or company.


DeWitt Risk Management Offers United Healthcare Medicare Plans

One of the most advantageous individual and group retiree solutions can be found with United Healthcare. As your Arizona Group Benefits and Individual Product Specialists, DeWitt Risk Care Management is available to discuss the pros and cons for you, your family or your group.

Your Medicare Advantage HMO and PPO Plans:

Offer your Medicare-eligible retirees medical and prescription drug coverage all in one plan with United Healthcare’s line of Medicare Advantage plans.

What are the benefits of Medicare Advantage plans? UnitedHealthcare’s Medicare Advantage plans provide

  1. Value
  2. Flexibility
  3. and Choice

It’s a solution designed to meet the needs of your company and your retirees by delivering:

  • Competitive premiums: Lower premiums with equivalent benefits
  • Extra benefits: End your reliance on the RDS program with optional benefits
  • Coverage options: More than 150 coverages to choose from
  • Plan availability: Local plans in 38 states as well as regional and national plans
  • Reduced financial risk: Fully insured premiums for better cost management

Medicare Advantage plans often offer more competitive premiums for equivalent benefit design, in comparison to traditional retiree plans. You may be able to end your reliance on the RDS program simply by adding Part D benefits to your plan. Optional benefits include Medicare Part D prescription drug coverage and rider options for additional vision, dental and chiropractic coverage. More than 150 standard integrated medical and prescription drug plan options, plus custom designs available for larger groups. Local plans available in over 70 markets across 38 states; regional and national plans, too. Fully insured premiums may allow employers/plan sponsors to manage and predict costs more effectively.

What are HMO and PPO? Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPO) plans are types of network-based plans. Here’s how they differ:

  • HMO Plans: Provide coverage for plan members through a network of locally contracted doctors and hospitals. These plans generally do not provide coverage outside the network of contracted providers, except in the case of an emergency.
  • Regional PPO Plans: Let plan members choose between in-network and out-of-network providers. These plans cover all medically-necessary covered benefits, in network or not. But services received outside the network will generally cost more.
  • National PPO Plans: Provide even greater flexibility to plan members by keeping the member’s cost sharing the same no matter if they use in-network or out-of-network providers. These plans are designed as one alternative to Group PFFS plans, which are no longer offered by UnitedHealthcare as a result of changes to federal regulations.

Are you looking for a lower-or even zero cost option? If you want to offer your retirees a Medicare Advantage plan, but want a low or zero premium with little to no program administration, you may want to consider endorsing one of our individual plans or our  Endorsed Group Medicare Advantage plans.

How many plans can I choose from? With nearly 70 standard combined medical and prescription drug  plan designs to choose from, it’s likely you will find one that suits your company’s needs. If not, we can create a custom plan for your group.

How do these plans benefit retirees? The UnitedHealthcare Medicare Advantage plans offer retirees more value and service than Original Medicare. For example, retirees receive:

  • The convenience of a single plan for their Medicare coverage
  • More benefits than Original Medicare Part A and Part B
  • Built-in Medicare Part D Prescription Drug coverage (optional)
  • Additional coverage for routine vision, hearing, dental and chiropractic care

Additional programs & services: Most UnitedHealthcare Medicare Advantage plans also offer valuable features and benefits, for example: fitness, wellness, disease management and caregiver support programs. These can be accessed at no cost.

Get a personalized quote: Learn more about the UnitedHealthcare Medicare Advantage plans and ask for a quote. Get in touch with DeWitt Risk Management today. Call to discuss details at 480-969-0202.

Wiggle Room for Small Group Tax Credit Users

Does being a small business give you extra wiggle room? If you are a user of the small employer health insurance tax credit, you could get some extra wiggle room for upcoming healthcare reform deadlines. Some users will be able to take advantage of extra time to start buying coverage through the exchanges.

A new draft regulation from the IRS (Internal Revenue Service) attempts to provide employer tax credit users with a bit more flexibility. If you are an employer with 25 or less “full time” (and modestly paid) employees, you could benefit from the draft regulation.

The Basics:

1. The Patient Protection and Affordable Care Act created a health insurance subsidy for employers through the addition of a tax credit provision (Section 45R) to the Internal Revenue Code.

2. When the PPACA Small Business Health Options Program exchanges open, employers falling into this category can use the SHOP plan to qualify for the tax credit.

3. If you are an employer that meets the basic qualifications, but your plan years and taxable year start on different dates, it may not be possible to take advantage of the “SHOP” exchange at the start of the first taxable year starting in 2014.

4. The transition rules would help employers in this situation by enabling them to wait until the first day of its first plan year in 2014 to begin offering SHOP coverage (instead of the first taxable year).

5. In this case, the IRS would treat the employer as if they had offered SHOP coverage for the entire taxable year (2014).

Sometimes the little guys do get a little bit of a head start. Don’t ignore the chance to maximize your company’s options during these times of change.

If you have questions on eligibility requirements, how upcoming healthcare reform changes will affect you and your company’s benefits, etc. please get in touch today. DeWitt Risk Management Consultants can provide you with expert answers at 480-969-0202.

Meet the YouToons: Getting Ready for Obamacare

The YouToons Get Ready for Obamacare: How Will YOU Be Covered?

Trying to decide what Obamacare means for you, your company or your employees? Meet the YouToons. DeWitt Risk Management urges everyone to get a general idea of the changes on the horizon and what they’ll actually mean for healthcare, the workplace, home, and family.

This short video about the health insurance changes coming your way under the Affordable Care Act (sometimes called Obamacare) gives you the basics; all you need to know to get ready. Big changes are coming in 2014. It’s time to get ready.

Questions? Concerns? Simply need to commiserate about your specific situation and how to maximize benefits while minimizing costs? Get in touch with one of the risk management specialists at DeWitt Risk Management today.

Zane Benefits’ Pre-Tax Premium Payment (PPP)

DeWitt Risk Management can show you how to offer every employee the chance to save 20-40% on the personal health insurance coverage of their choice. It’s the perfect solution for companies that don’t offer group health insurance coverage to their employees.

If you don’t offer group insurance benefits to your employees, you’re not alone. According to the Employee Benefit Research Institute, more than half of employees don’t have group health benefits. (47% of employees aren’t offered group health coverage and 15% aren’t eligible for employer health coverage).

Problems preventing companies from offering health insurance coverage to their employees may seem impossible to overcome:

  • Cost
  • Participation Requirements
  • Turnover
  • Part-Time Help
  • Seasonal Help
  • Multiple Locations

But there is a solution. It’s Zane Benefits’ Pre-Tax Premium Payment (PPP).

  • Extremely Low Cost
  • Zero Participation Requirements
  • Increased Employee Retention
  • Both Full Time and Part Time Employees Eligible

PPP reduces the amount of money your company pays in FICA tax AND increases employee retention by providing a tax savings for your employees. PPP (Pre-Tax Premium Payment) is a Section 125 (similar to the 125 doc many companies may already have in place that allows pre-tax deductions of group premiums). PPP enables your employees to purchase their own personal health insurance coverage with tax-free dollars. By calling or emailing DeWitt Risk Management to implement PPP you can help your employees save between 20-40%. They obtain the savings simply by paying their own personal insurance coverage premiums with pre-tax dollars rather then after-tax dollars. Utilizing PPP also gives employees the benefit of being able to choose the personal health insurance coverage that is best for their individual situation and health needs. The benefits even extend to supplemental coverages (dental insurance, vision insurance, etc.)

In general terms, Zane Benefits’ PPP allows employees to select a pre-tax salary reduction. This amount can then be reimbursed back to the employee after their approved personal health insurance premium has been paid. Paying personal/family insurance coverage premiums with pre-tax dollars means savings that coincide with each employees tax bracket (typically a savings of 20-40%). This reduction in taxable income for each of your employees results in reduced FICA taxes for the company so PPP provides financial benefits to both the employer and the employee.

zane benefits

Consider the following example:

A company named We Hire People has 25 employees. One of their employees is named Sally Worker. Sally Worker discussed her family’s specific health insurance coverage needs with an Individual Product Specialist at DeWitt Risk Management. After choosing the specific health insurance coverage that would best suit their needs, Sally Worker had a monthly health insurance premium of $500. Her income tax bracket is 25%. In this particular situation, Sally Worker will save $125/month by paying her individual health insurance coverage premium with pre-tax dollars through Zane Benefits’ PPP. With monthly savings at $125, Sally Worker will benefit from an annual savings of $1,500. Using this example, We Hire People gets FICA savings of $39.25/month (7.65% monthly savings). The annual FICA savings received as Sally Worker participates in Zane Benefits’ PPP adds up to $459.00. If we use Sally Worker’s savings as an average for the rest of We Hire People’s 25 staff members, we can estimate that offering employees the chance to save through Zane Benefits PPP provides FICA tax savings of $11,475.00 per year for the company.

Are you ready to calculate your company’s potential annual FICA tax savings? Give DeWitt Risk Management a call. We can provide each employee with the opportunity to calculate their potential savings by paying current personal insurance premiums pre-tax vs. after tax as well as providing employees without individual health insurance coverage with personal consultations to discuss potential coverages that suit their budgets. Offering PPP to your employees could mean substantial savings for your business.

What is a Broker and Do You Need One?

ImageA broker is a licensed agent authorized to do business by the respective State Department of Insurance. Brokers (in comparison to “agents”) work for the client. They sell and represent various insurance products and solutions. Brokers are a vital work force since most insurance companies can not “sell” directly to the public.

A Broker is licensed with many insurance companies but is independent in that they are not agents of the insurance companies. They do not represent one insurance company or another. They are trained and knowledgeable regarding all the insurance options in order to guide individuals and groups toward the insurance solutions/packages that will best suit their needs. 

Many wonder if utilizing the expertise of a broker will result in a higher cost for their insurance coverage. This is why we find it important to discuss broker compensation. The most common form of broker compensation is premium commission. Although the broker works for you, the insurance companies pay the broker commission. It is important to note, premiums charged to the employer are the same with or without a Broker. Contracting with a Broker provides you with an additional “arm” of service in addition to any service the insurance companies provide. 

Broker Contracting depends upon A Broker of Record (BOR) letter from the client. It authorizes the broker to work on the behalf of the client for all insurance matters. Brokers can be appointed for one or all contracts. The Broker of Record appointment remains in place until rescinded by the client in writing. The BOR is completely revocable by the client at any time for any reason.