Advantage Benefits
Issue: # 6 December 26, 2007 
Bill and Vanessa
Greetings!
 
Keeping you informed of the latest developments in the employee benefit marketplace. 
If you have any questions, e-mail Bill or Vanessa.  To learn more about Advantage Benefits, click here.     Many of our clients have found these newsletters to be quite helpful and we have now set up a link to hold all the archived newsletters on-line that can be accessed at anytime. 
 
If you know anyone, who may find this information of interest, please forward them this newsletter (there is a link on the bottom), and they can subscribe themselves.  
 
 
Sincerely,
 

Bill Randell & Vanessa Costa
Advantage Benefits
 
Year Ending Reminders 
Checklist
 
As we approach the end of 2007, here are some things you should remember to do:
 
  1. Remind employees they not only need W-2 forms, but the new 1099-HC from the health insurance carrier for their personal tax returns.   An employee needs to have this form as proof of health insurance or they will be subject to penalties from the Commonwealth of Massachusetts.
  2. Your payroll company needs the year ending claims reports on any existing Short-term and Long-term Disability programs to properly complete the W-2's.
  3. All employees who are eligible for benefits, but have not signed up for health insurance, must have a signed waiver form on file.
  4. If you have Group Life and Disability Insurances and the benefits are based on salary, you should forward an updated salary listing to the insurance company.

 

 
Open Enrollment Through December 31st 
Employees Can Still Avoid Penalties
 
 
Employees have three opportunities to enroll in the company sponsored health plan:
  1. Initial eligibility after the date of hire..
  2. Annual open enrollment.
  3. Qualifying Event: Typical examples are marriage, divorce, birth of a child and loss of coverage, which requires proof of loss from the previous carrier.
This year, with the new Massachusetts Healthcare Reforms, all carriers are allowing employees to enroll through December 31st, to secure coverage by the year's end.
2008 Employee Penalty  
Much Larger then 2007
In 2007, an employee will lose their personal exemption, if they do not have health insurance .  In dollars and cents that equates to a $219 penalty.  
 
In addition to the loss of the personal exemption, an employee in 2008 will be penalized 50% of the annual cost of the cheapest health plan, known as the bronze plan, that can be purchased through the Massachusetts Health Connector.   Assume the monthly cost for the bronze plan for was $200 per month for the bronze plan, the penalty will be $1,419:
 
  •  $219 personal exemption
  •  50% of the annual premium, $2,400.     

The family penalty will be even greater since the cost for a family bronze plan will be much higher.   

Employees Can Avoid Penalties 
Two Ways
 
We expect to see more people filing paperwork claiming exemption from the law for either hardship or religious reasons.  
 
How will the Commonwealth of Massachusetts be able to reverse someone's assertion that 1) they can not afford the health insurance premiums or 2) prove a tax-filer is not a member of a religion, for example the Christian Science Church.  In the end it seems unfair, even discriminatory, that one tax-filer can face a penalty, while another in the same situation would not not be penalized solely based on their religious affiliation? 
 
 
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