Control Health Care Costs and Save Taxes?Written by David M. Schmader
One of most prominent issues being discussed in media is rising cost of health insurance. Employees are being asked to contribute an ever increasing amount of their pay to group insurance premiums. Employers face double digit increases health insurance premiums while dealing with customers who are not accepting price increases. Self–employed individuals and those who must purchase individual health insurance are feeling this same bite out of their own pocket. These are in addition to cost concerns of medications and prescriptions.Health Savings Accounts may be a way to cut health insurance premiums, take control of health care costs and save money on taxes. Health Savings Accounts (HSA) were part of Medicare Act Congress passed in December, 2003. They are designed to help take control of health care expenses with a tax-favored savings account and a high deductible health insurance plan. Money in savings account helps pay deductible and health expenses until insurance benefits kick in. The funds left unspent in HSA remain in account and accumulate earnings tax free. In same fashion as an IRA, one can build tax-sheltered nest eggs; in this case, to cover out-of-pocket medical costs. High Deductible Health Insurance is needed to get benefits of an HSA. The law requires that savings account be combined with high deductible health insurance. The minimum high deductible for an individual is $1,000 and $2,000 for a family. The deductible chosen can be higher than those amounts, which would provide an even greater tax deduction. In 2004, an individual can shelter up to $2,600 and a family up to $5,150. An additional $500 contribution for 2004 is allowed for taxpayers 55 and older. Because insurance company doesn’t have to process and pay claims for routine, low-dollar medical care high deductible health insurance costs less than traditional $250 or $500 deductible coverage. Contributions to HSA are with pre-tax dollars, a tax deduction right off top of income. Any investment growth and withdrawals for health-related expenses are free from taxation. That makes tax benefits better than those of an IRA. With IRAs, money is taxed either before it goes into account or can be taxed if withdrawn prior to age 59-1/2. A typical scenario for someone purchasing an individual policy: A 50 year old male with a spouse and dependent children purchases a health insurance policy with no deductible and a $45 office visit co-pay for doctors’ office visits for a premium of about $600 per month. By choosing to open a Health Savings Account and opting for a high deductible of $5,000 monthly premium might drop to $375. The savings in premium of $225 would then be put into HSA on a monthly basis accumulating to $2,700 by end of 12 months. An additional amount of $2,300 could be contributed for a maximum deduction of $5,000 from taxes and a nest egg of that amount from which to pay medical expenses.
| | Progress Reviews: Your Key To Effective CoachingWritten by Susan Cullen
One of most effective ways to help your staff succeed is to provide regular, consistent coaching throughout year. A Progress Review is a specific kind of coaching discussion, tied to employee’s Annual Objectives and Standards. It is an informal discussion in which manager coaches direct report to meet any unmet goals that are below target, and praises him or her for goals that are being met. Conducting progress reviews are a very important role for being an effective leader or coach. It is suggested that each of your direct reports receive a progress review discussion from you at least 2-3 times per year.An outline of process for conducting a Progress Review is below: 1.Refer to annual objectives and standards previously developed. Give a copy to employee.
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