FAQ

Q. Health Reform Starts Today: Are You Ready?

A. Six months ago, Congress and President Obama drastically overhauled the nation’s health care system, passing legislation that will affect nearly every American. The first round of the law’s provisions go into effect today. Need resources for you and your clients? Have questions about health reform? Let Executive Planning Group, P.A. help.

Q. What tax credits for small businesses were included in the Patient Protection and Affordable Care Act?

The tax credit is worth up to 35% of the premium your business pays to cover your workers. In 2014, the value of the credit will increase to 50%. Your business qualifies for the credit if you cover at least 50% of the cost of health care coverage for your workers, pay average annual wages below $50,000 and have less than the equivalent of 25 full time workers.

The size of your credit depends on your average wages and the number of employees you have. The full credit is available to firms with average wages below $25,000 and less than 10 full time equivalent workers. It phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent between 10 and 25 full time workers.

The credit is not payable in advance to the taxpayer nor is it refundable. The credit is only available to offset actual tax liability and is claimed on the employer’s tax return

We will keep you informed as the regulations are being written. In the meantime, if you have any questions, please do not hesitate to give us a call.

Q. What are some of the changes in the Patient Protection and Affordable Care Act that are effective in 2010?

  1. Extended to age 26 (beginning with plan years on or after September 23, 2010)
    • Dependent children must be covered until the child reaches age 26. This includes married dependent children but does not include the spouse or grandchildren
    • Grandfathered plan may exclude such dependent children if they are eligible for coverage under another employer-sponsored plan
    • Dependent age extension applies only to medical plans
  2. No lifetime limits (beginning with plan years on or after September 23, 2010)
    • No lifetime dollar limits on the value of “essential benefits”
    • Lifetime limit prohibition does NOT apply to nonessential benefits
    • Prohibition on lifetime limits applies only to medical plans
  3. No pre-existing condition exclusions for dependent children (beginning with plan years on or after September 23, 2010)
    • Prohibits pre-existing condition exclusions on children under the age of 19
    • Prohibition of pre-existing condition exclusions for adults takes effect in 2014
    • Prohibition on pre-ex applies only to medical plans
  4. New retiree reinsurance (beginning June 23, 2010)
    • New program to encourage employers to maintain benefits to retirees over 55 and not eligible for Medicare
    • Program will reimburse employer-provided health plans for 80% of certain costs of providing health insurance to early retirees
    • Reimbursement applies only to claims that exceed $15,000 but are no greater than $90,000
  5. Small business tax credit (Effective now)
    • Must cover at least 50 percent of the cost for workers, pay average annual wages below $50,000 and have less than the equivalent of 25 full-time workers (i.e. a firm with fewer than 50 half-time workers would be eligible)
    • Tax credit worth up to 35 percent of the premiums (25 percent for nonprofits)
    • Full credit is available to firms with average wages below$25,000 and less than 10 full-time equivalent workers
    • Phases out gradually for firms with average wages between $25,000 and $50,000 and equivalent of between10 and 25 full-time workers

Consult with your NAIFA advisor for more information

Q. How much life insurance do I need?

This depends on your age, net worth, income, number of dependents, financial obligations and many more variables. We will work with you to conduct a comprehensive review of your personal situation as well as your life goals to assist you in coming up with an amount that is appropriate for you.

Q. Should I purchase my health insurance through my employer or on an individual policy?

You will usually get the best price and coverage through an employer sponsored plan. This is particularly true if your employer is subsidizing the premium.

Q. What is critical illness insurance?

Critical illness insurance is a policy that insures you if you come down with a critical illness that is specified as being covered by the policy. An example is cancer. The critical illness policy will pay out a lump sum if you are diagnosed with a specified medical condition.

Q. Can I purchase disability insurance if I am self-employed?

Yes, usually if you are in good health and can document your earnings.

Q. How do I know if I am insurable?

We have extensive experience in handling both life insurance and health insurance for individuals with various health conditions. We will usually know what is the best approach in trying secure coverage at the best price possible. However, if you do have health issues, taking a physical exam and having your application reviewed by an underwriter is almost always going to be required.

Q. Should I purchase term life insurance or one of the permanent types of life insurance products?

We would want to review a person’s financial goals and resources as well as other variables in order to determine the best approach for any one individual.

Q. The law on estate taxes has recently been changed. Does this mean I need to adjust my will or the way I set up my estate?

Probably. We can conduct a review for you and recommend adjustments if necessary.

Q. Do you handle key man insurance?

Yes, we do. Contact our office today to get more information.

Q. How can I calculate how much I should be saving towards retirement?

This will depend on your expected income needs at retirement. You will have to make several assumptions to calculate the amount of savings needed to fund those retirement income needs. These assumptions include one regarding the rate of return you think you will earn on your investments, the inflation rate and your life expectancy. The Financial Calculators on this site can assist you with some of these calculations.