Premium-Only-Plan (POP) Benefits

The Advantages of Pre-Tax Versus Post Tax Health Plans Offering what are known as  Premium-Only-Plans (POP) or Section 125 plans to employees allows employees to pay their contribution of health care premiums using pre-tax dollars. This has benefits for both the employer and the employee: EMPLOYEES For the employee, it is one of the easiest and most efficient ways to decrease healthcare costs and increase spendable income by a significant margin. With a Section 125 plan allowing employees to pay for health premiums on a pre-tax basis, their taxable income decreases. With lower taxable income, employees are required to pay less income taxes, resulting in an overall increase in disposable income for the employees. Employees are able to save, on average, 30% in federal, state, and local taxes that they pay for health premiums. This is an obvious benefit for employees of companies who offer pre-tax health plans, and the benefit extends to the employers as well. EMPLOYERS Employers are able to profit from these Premium-Only-Plans in a variety of ways. Since with these POPs employees pay for premiums in a pre-tax basis, overall payroll expenses are reduced. With reduced payroll, the employer enjoys lower costs on workers’ compensation and decreased tax liabilities for social security, unemployment, and Medicare. Employers can save an average of $115 per participating employee in FICA payroll taxes. Employers also profit from these plans, because they attract and maintain higher quality employees with these added income benefits.   IMPLEMENTATION Section 125 plans typically cost a small fee to implement (around $125) and is free in some cases, depending on the size of the group....

Grandmothering Law

California Senate Bill 1446 for Small Businesses Renewing 4th Quarter 2014 The California Senate Bill 1446 has recently passed (July 7th, 2014; effective immediately), allowing small businesses renewing group health plans in the 4th quarter of this year to continue with their policies for another year even though these policies may not comply with the Affordable Care Act (ACA). If your company is up for renewal in the fourth quarter of this year, it is very likely that the 2013 plan you signed up for in the fourth quarter of the previous year is not compliant with the new regulations on health care starting in 2014. The recent California Senate bill was has allowed some leeway for companies to transition to the new policies by giving businesses that currently have ACA non-compliant plans to continue with these plans for one more year. If this bill was not passed, these policies would be forced to be cancelled and businesses would need to select from the new, ACA compliant plans. Bill 1446 only applies to small businesses of 50 or less employees. People who have attained their health coverage on the Individual and Family Market will be required to transition to ACA compliant plans at their next renewal. This bill by no means forces to employers to stick with their 2014 plans; it only gives them the option to continue with the plan for another year. If the employer would like to transition to an ACA compliant plan, he or she may certainly do that. In fact, the California Senate Bill 1446 does not address rate changes, so there may very...

California auto theft rates highest in USA

California again leads the nation in vehicle theft rates. This means that car insurance buyers will continue to pay some of the highest costs in the country for vehicle theft insurance. Some auto insurance policies do not cover theft or loss of use. If you are a California driver, please be aware that you should consider auto insurance that has theft coverage. The National Insurance Crime Bureau’s (NICB) “Hot Spots” report examines vehicle theft data obtained from the National Crime Information Center (NCIC) for each of the nation’s metropolitan statistical areas (MSAs). For 2013, the 10 MSAs with the highest vehicle theft rates were: 2013 Ranking 2012 Ranking 1 Bakersfield, Calif. 3 2 Fresno, Calif. 2 3 Modesto, Calif. 1 4 San Francisco/Oakland/Hayward, Calif. 6 5 Stockton-Lodi, Calif. 4 6 Redding, Calif. 10 7 Spokane-Spokane Valley, Wash. 9 8 Vallejo-Fairfield, Calif. 8 9 San Jose/Sunnyvale/Santa Clara, Calif. 7 10 Yuba City, Calif. 31 Although California tends to place high in this report, this is the first time that California has held nine of the top 10 spots for MSAs with the highest per capita vehicle theft...

Top 10 Reasons to Choose NCI

1. Customer Service We do not make you wait on hold like the carriers or the goliath brokers. Our response is immediate. Every aspect of our business revolves around what is best for our clients. We understand that by helping your company grow in any way we can, we will form long lasting business relationships. 2. No Broker Fees Because health insurance prices are fixed by law, there are no broker fees associated with health insurance in California. Basically, our services come at no cost to you, the client. 3. Representative of all the carriers We offer plans from all the major carriers in California. 4. Reduced Payroll, HR, and Accounting Costs New City Insurance has formed business partnerships with other local businesses in Southern California. These local businesses offer significant discounts to our clients due to the volume of business we service. In some cases, we are able to provide services, such as payroll, at no cost to our clients! 5. Handle all lines of insurance Whether you are interested in group health, life, disability, dental, vision, workers’ compensation, commercial auto, or any other insurance need. NCI is suited to provide all lines of insurance in house to our group business clients in California. 6. State of the Art Technology For those that want it, we can make the application process totally digital. E-signatures and fillable PDF forms can be used to streamline paperwork to get information sent to the carriers as quickly and efficiently as possible. 7. Developed Relationships with Local Carrier Representatives We have formed lasting relationships with local representatives in Southern California for all the...

Handling Renewal Cost Increases

Take this scenario: you’re a business owner, and the annual renewal for the health insurance you offer to your employees is approaching. You receive a letter in the mail stating that your health insurance prices are increasing by 30, 40, or even 50%. The situation described above has become a common occurrence in 2014, and business owners throughout California have been looking for ways to solve this problem. I’m here to explain to you how the most savvy business owners have been able to continue to offer health coverage to themselves, their families, and their employees without breaking the bank. I will explain exactly why below, but for the sake of simplicity, there are three easy words that are the secret to solving the booming increases in health insurance costs: Use an Agent. It may seem simple, but so many business owners do not take advantage of this drastically helpful service. In some realms of industry, agents and brokers come with a negative connotation, but in the California health insurance world agents and brokers are nothing but beneficial to their clients. Let me explain why. First of all, AN AGENT DOESN’T COST ANYTHING. Some people have a hard time wrapping their head around this; of course, agents DO get paid for their work, but they are NOT paid by their clients. They are paid directly by the insurance company. And since insurance premiums are fixed by law in California, the price of going direct to the carrier is the same as going to an agent. This all boils down to the fact the businesses pay nothing extra to use...

Covered CA Small Group U/W

*This list is meant to be informative and is not intended to be all-inclusive. Other policies and guidelines may apply. Covered California Small Group (SHOP) Underwriting Guidelines GROUP SIZE: 1-50 eligible employees RATE GUARANTEE: 12 months RATES: Rates are based on three factors: 1) age, 2) employee ZIP Code, and 3) family composition. There is a single age band for ages 0-20 and ages 64+. All other ages have their own, individual age band. Employee and spouse are rated separately based on age. Child dependents are rated separately based on age. Child dependents are rated separately for the first three children for ages 0-20. The fourth child and up in this age band are not rated. Child dependents ages 21-25 are rated individually. Family rates are the sum of all of the individual rates. FEES: There are no additional employer or employee fees in SHOP. CONTRIBUTION: Employers first select the metal tier (Platinum, Gold, Silver, or Bronze) they want to offer their employees. Then, within that metal tier, they select an anchor plan they wish to tie their contribution to. SHOP will offer a % of selected anchor plan contribution scenario, applied to employee and dependent coverage when offered to dependents. Employers are required to contribute a minimum of 50% of the employee-only premium of that anchor plan for each employee electing coverage. Note that the amount of the contribution will vary by the age of the employee and any dependent contributions being offered. There is no requirement to contribute to dependent coverage. When the employer contributes 100% of the employee premium for the anchor plan, 100% of the employees must enroll. PARTICIPATION: There is a 70% minimum participation requirement. Valid waivers are...
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