| Issue: # 40 |
November 9 , 2009 |
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Before we get to the newsletter, lets take a moment to thank all Veterans for their dedicated service to this country.
Every day there is an announcement about the proposed National Insurance Exchange or Public Option. Many of the items discussed in the national plan basically mirror the Commonwealth of Massachusetts. How well has it gone in Massachusetts? We will use these newsletters to update you as any legislation passes. Now more than ever it is important to partner with people, who work with employee benefits every day.
As always, if you have any questions email Bill or Vanessa. We hope you find these newsletters helpful, please forward to anyone who you may find this of interest. To learn more about Advantage Benefits click here.
Next time you are in our area, check out our new electronic message board.
Sincerely,
Bill Randell, CLU, CHFC Vanessa Costa, CLU,CHFC
Advantage Benefits Group, Inc.
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| Compliance Corner
COBRA for fired employees |
Question:
Do I have to offer COBRA coverage to an employee who was terminated for insubordination?
Answer:
COBRA needs to be offered to any employee leaving your company except in the event of a gross offense that would keep the employee from being able to collect unemployment. Examples of this would include both gross misconduct or a criminal offense. Insubordination unto itself, however, would not be sufficient to not offer COBRA to the employee. For further information on COBRA, e-mail Shelley. |
| COBRA subsidy
Bill to extend is proposed |
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The current subsidy is available for up to nine months for employees who have lost their jobs since Sept. 1, 2008. Unless the law is extended, the subsidy will not be available to employees laid off after Dec. 31, 2009.
Legislation introduced in the U.S. House of Representatives would not only extend but expand the expiring provision in a 2009 economic stimulus law in which the federal government pays 65% of COBRA health care premiums for employees who are involuntarily terminated. Under H.R. 3930, introduced this week by Rep. Joe Sestak, D-Pa., the subsidy would be provided for up to 15 months. In addition, those laid off from Jan. 1, 2010, through June 30, 2010, also would be eligible for the subsidy.
We will keep you abreast of the proposal as the deadline approaches.
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Flexible spending accounts
Proposal to cap maximum limit at $2,500 |
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How will the Federal Government pay for healthcare reform? One proposal is to limit amounts employees may contribute to flexible spending accounts (FSA) down to $2,500. An FSA allows employees to contribute pre-tax dollars to pay for unreimbursed medical expenses such as:
- dental work
- insurance co-payments & deductibles
- orthodontia
Unlike a Health Savings Account (HSA), people are more familiar with FSA's as the the "use it or lose it" plan. Actually an employee has 2 1/2 months after the end of the plan year to use these monies.
Capping contributions to these accounts is estimated to save $13 billion over 10 years. However, in an effort to make health insurance more affordable, this will actually make it more expensive for people who have more than $2,500 of unreimbursed medical expenses, as it takes away the tax advantaged savings. |
| Group long term disability
Important yet affordable benefit |
| Most of our clients have a comprehensive set of benefits including medical, life and short term disability insurance. There are still many businesses that do not have a formal group long term disability program. This benefit would start when the short-term ends and continues typically to age 65.
Costs for this benefit are more affordable than you would expect. In many cases, for a group under 50 employees, the monthly premium is less than an individual disability policy just for the business owner. In addition, you may carve out a defined class of employees such as managers, or even define a class based on years of service or wages. The benefit may also be paid 100% by employees if so desired, but there are minimum participation guidelines and minimum group sizes that are applicable.
Another key feature is there are no medical questions or underwriting. Just like standard group life and short term disability, the insurance carrier will offer the plan without any medical questions as long as participation requirements are met. It is standard, however, to include a 12 or 24 month pre-existing condition exclusion clause. If you have had difficulty getting individual long-term insurance due to a pre-existing condition, implement a group long-term disability plan today.
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