You wanted me to keep you up to date on legislative action on long term care insurance.  Here are few items that arose from the new Health Care Legislation.  The first is:

The CLASS Act: Community Living Assistance Service and Support Act.  The act mandates starting 2012 or perhaps 2013 (they still have not finalized the writing) that all full time employees will be given the opportunity to sign up for long term care insurance underwritten  by the US Government.  This is a voluntary act. 

1) an individual can choose not to sign up and enroll at a later time.  There will be a future penalty if they wait.

2) The premiums are estimated by the GAO to be somewhere in the area of $100-$250 per month.  This ambiguous number is the result of being unable to predict how many will sign up.  It is estimated anywhere from 10% to as high as 18% of those offered will sign up.  The premiums are to hold themselves for 75 years.

3) A worker will have to pay in for five years before the coverage starts. 

The insurance industry is excited about this because it creates an awareness of long term care and our products will beat CLASS for everyone except the chronically ill. For further information, check these out:

www.aahsa.org

http://newoldage.blogs.nytimes.com/2010/03/24/a-new-long-term-care-insurance-program/

A second state law went into effect in 2010 but will not be implemented until some time in 2011.  This is called  ”The Partnership Act”.  It arose from model legislation from the National Association of Insurance Commissioners.  Under current law, if you exhaust your assets and go to a Medicaid facility, they likely will cover your care however upon your death, if there are assets in your estate, Medicare will attach those assets to recover what they paid for your care.  The Partnership Act allows you to buy a compliant long term care insurance policy from an insurance company and the amount of coverage you bought will offset what Medicaid might pay.  For example, you buy a $300,000 benefit, the first $300,000 of Medicaid is exempt from recovery.  For further information: http://www.rwjf.org/files/research/medicaideligibilityissuesforltcpartnership.pdf

The other laws are some what under the radar screen.  They are called Filial Laws.  These laws have been passed in thirty states and North Carolina is one of them.  Our law is General Statute 14-3261.1 and was passed in 1999.  The law requires children to pay for the necessities of their parents if their parents cannot take care of themselves.  Several states,  are writing implementing legislation.  Under the proposed legislation, the state can attach up to 25% of a child’s assets in excess of the federal poverty level, to take care of his/her parents.  http://assets.aarp.org/www.aarp.org_/articles/bulletin/interactive/filialpiety/index.html

If I have motivated you to be interested in long term care insurance, please call.

In less than six months, on January 1, 2011, the largest tax hikes in the history of America will take effect.

They will hit families and small businesses in three great waves.

On January 1, 2011, here’s what happens… (read it to the end, so you see all three waves)…

     
First Wave:


Expiration of 2001 and 2003 Tax Relief

In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families.

These will all expire on January 1, 2011.

Personal income tax rates will rise.

The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed).  
     
The lowest rate will rise from 10 to 15 percent.  
     
All the rates in between will also rise.  
     

Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates.  


The full list of marginal rate hikes is below:

• The 10% bracket rises to an expanded 15%
•  
• The 25% bracket rises to 28%
•  
• The 28% bracket rises to 31%
•  
• The 33% bracket rises to 36%
•  
• The 35% bracket rises to 39.6%

 
Higher taxes on marriage and family.  

The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of income.  

The child tax credit will be cut in half from $1000 to $500 per child.  

The standard deduction will no longer be doubled for married couples relative to the single level.  

The dependent care and adoption tax credits will be cut.

The return of the Death Tax.

This year only, there is no death tax.  (It’s a quirk!) For those dying on or after January 1, 2011, there is a 55 percent
top death tax rate on estates over $1 million.  A person leaving behind two homes, a business, a retirement account, could easily pass along a death tax bill to their loved ones.  Think of the farmers who don’t make much money, but their land, which they purchased years ago with after-tax dollars, is now worth a lot of money.  Their children will have to sell the farm, which may be their livelihood, just to pay the estate tax if they don’t have the cash sitting around to pay the tax.  Think about your own family’s assets.  Maybe your family owns real estate, or a business that doesn’t make much money, but the building and equipment are worth $1 million.  Upon their death, you can inherit the $1 million business tax free, but if they own a home, stock, cash worth $500K on top of the $1 million business, then you will owe the government $275,000 cash!  That’s 55% of the value of the assets over $1 million!  Do you have that kind of cash sitting around waiting to pay the estate tax?

Higher tax rates on savers and investors.

The capital gains tax will rise from 15 percent this year to 20 percent in 2011.  

The dividends tax will rise from 15 percent this year to 39.6 percent in 2011.  

These rates will rise another 3.8 percent in 2013.

Second Wave:

Obamacare

There are over twenty new or higher taxes in Obamacare. Several will first go into effect on January 1, 2011.  They include:

The “Medicine Cabinet Tax”

Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).

The “Special Needs Kids Tax”

This provision of Obamacare imposes a cap on flexible spending accounts (FSAs) of $2500 (Currently, there is no federal government limit). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.  

There are thousands of families with special needs children in the United States , and many of them use FSAs to pay for special needs education.

Tuition rates at one leading school that teaches special needs children in Washington , D.C. ( National Child Research Center ) can easily exceed $14,000 per year.

Under tax rules, FSA dollars can not be used to pay for this type of special needs education.

The HSA (Health Savings Account) Withdrawal Tax Hike.

This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.

Third Wave:

The Alternative Minimum Tax (AMT) and Employer Tax Hikes

When Americans prepare to file their tax returns in January of 2011, they’ll be in for a nasty surprise-the AMT won’t be held harmless, and many tax relief provisions will have expired.

The major items include:

The AMT will ensnare over 28 million families, up from 4 million last year.

According to the left-leaning Tax Policy Center , Congress’ failure to index the AMT will lead to an explosion of AMT taxpaying families-rising from 4 million last year to 28.5 million.  These families will have to calculate their tax burdens twice, and pay taxes at the higher level.  The AMT was created in 1969 to ensnare a handful of taxpayers.

Small business expensing will be slashed and 50% expensing will disappear.

Small businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment purchases up to $250,000.  

This will be cut all the way down to $25,000.  Larger businesses can currently expense half of their purchases of equipment.  

In January of 2011, all of it will have to be “depreciated.”

Taxes will be raised on all types of businesses.

There are literally scores of tax hikes on business that will take place.  The biggest is the loss of the “research and experimentation tax credit,” but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs.

Tax Benefits for Education and Teaching Reduced.

The deduction for tuition and fees will not be available.

Tax credits for education will be limited.  

Teachers will no longer be able to deduct classroom expenses.

Coverdell Education Savings Accounts will be cut.

Employer-provided educational assistance is curtailed.  

The student loan interest deduction will be disallowed for hundreds of thousands of families.

Charitable Contributions from IRAs no longer allowed.

Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA.  

This contribution also counts toward an annual “required minimum distribution.”  This ability will no longer be there.

PDF  Version  Read more: <http://www.atr.org/six-months-untilbr-largest-tax-hikes-a5171#>; http://www.atr.org/six-months-untilbr-largest-tax-hikes-a5171#%23ixzz0sY8waPq1

And worse yet?

Now, your insurance will be INCOME on your W2′s!

One of the surprises we’ll find come next year, is what follows – - a little “surprise” that 99% of us had no idea was included in the “new and improved” healthcare legislation . . . the dupes, er, dopes, who backed this administration will be astonished!

Starting in 2011, (next year folks), your W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are given by the company. It does not matter if that’s a private concern or governmental body of some sort.  

If you’re retired?  So what… your gross will go up by the amount of insurance you get.

You will be required to pay taxes on a large sum of money that you have never seen.  Take your tax form you just finished and see what $15,000 or $20,000 additional gross does to your tax debt.  That’s what you’ll pay next year.  

For many, it also puts you into a new higher bracket so it’s even worse.

This is how the government is going to buy insurance for the15% that don’t have insurance and it’s only part of the tax increases.

Not believing this???  Here is a research of the summaries…..

On page 25 of 29: TITLE IX REVENUE PROVISIONS- SUBTITLE A: REVENUE OFFSET PROVISIONS-(sec. 9001,
as modified by sec. 10901) Sec.9002  ”requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer sponsored group health coverage that is excludable from the employees gross income.”

- Joan Pryde is the senior tax editor for the Kiplinger letters.
- Go to Kiplingers and read about 13 tax changes that could affect you.  Number 3 is what is above.

By GINA KOLATA-New York Times

Published: July 13, 2010

For the first time in 25 years, medical experts are proposing a major change in the criteria for Alzheimer’s disease, part of a new movement to diagnose and, eventually, treat the disease earlier.

The new diagnostic guidelines, presented Tuesday at an international Alzheimer’s meeting in Hawaii, would mean that new technology like brain scans would be used to detect the disease even before there are evident memory problems or other symptoms.

If the guidelines are adopted in the fall, as expected, some experts predict a two- to threefold increase in the number of people with Alzheimer’s disease. Many more people would be told they probably are on their way to getting it. The Alzheimer’s Association says 5.3 million Americans now have the disease.

The changes could also help drug companies that are, for the first time, developing new drugs to try to attack the disease earlier. So far, there are no drugs that alter the course of the disease.

Development of the guidelines, by panels of experts convened by the National Institute on Aging and the Alzheimer’s Association, began a year ago because, with a new understanding of the disease and new ways of detection, it was becoming clear that the old method of diagnosing Alzheimer’s was sorely outdated.

The current formal criteria for diagnosing Alzheimer’s require steadily progressing dementia — memory loss and an inability to carry out day-to-day activities, like dressing or bathing — along with a pathologist’s report of plaque and another abnormality, known as tangles, in the brain after death.

But researchers are now convinced that the disease is present a decade or more before dementia.

“Our thinking has changed dramatically,” said Dr. Paul Aisen, an Alzheimer’s researcher at the University of California, San Diego, and a member of one of the groups formulating the new guidelines. “We now view dementia as a late stage in the process.”

The new guidelines include criteria for three stages of the disease: preclinical disease, mild cognitive impairment due to Alzheimer’s disease and, lastly, Alzheimer’s dementia. The guidelines should make diagnosing the final stage of the disease in people who have dementia more definitive. But, the guidelines also say that the earlier a diagnosis is made the less certain it is. And so the new effort to diagnose the disease earlier could, at least initially, lead to more mistaken diagnoses.

Under the new guidelines, for the first time, diagnoses will aim to identify the disease as it is developing by using results from so-called biomarkers — tests like brain scans, M.R.I. scans and spinal taps that reveal telltale brain changes.

The biomarkers were developed and tested only recently and none have been formally approved for Alzheimer’s diagnosis. One of the newest, a PET scan, shows plaque in the brain — a unique sign of Alzheimer’s brain pathology. The others provide strong indications that Alzheimer’s is present, even when patients do not yet have dementia or even much memory loss.

Dr. Aisen says he foresees a day when people in their 50s routinely have biomarker tests for Alzheimer’s and, if the tests indicate the disease is brewing, take drugs to halt it. That is a ways off but, he said, but “it’s where we are heading.”

“This is a major advance,” said Dr. John Morris, an Alzheimer’s researcher at Washington University in St. Louis who helped formulate the guidelines. “We used to say we did not know for certain it was Alzheimer’s until the brain is examined on autopsy.”

Dr. Ronald Petersen, an Alzheimer’s researcher at the Mayo Clinic in Minnesota and chairman of the Alzheimer’s Association’s medical and scientific advisory council, said adding biomarkers to a diagnosis would be a big improvement.

Today, he says, when a patient comes with memory problems, doctors might say that the person has a chance of developing Alzheimer’s in the next decade, a chance of not getting much worse for several years, and a chance of actually getting better.

Tests like brain scans, Dr. Petersen said, “will allow us to be much more definitive.” If the tests show changes characteristic of Alzheimer’s disease, a doctor can say, “I think you are on the Alzheimer’s road.”

That can be a difficult conversation, but it can allow patients and their families to plan. “At least it’s a conversation the physician can have with the patient,” Dr. Petersen said.

Alzheimer’s experts welcomed the new criteria.

“Over all, I think this is a giant step in the right direction,” said Dr. P. Murali Doraiswamy, a psychiatry professor and Alzheimer’s disease researcher at Duke University who was not involved with making the guidelines. “It moves us closer to the cause of the disease rather than just looking at symptoms.”

But, he added, it also is a huge change.

“This has implications for everybody alive, anybody who is getting older,” Dr. Doraiswamy said. Among other things, he said, it will encourage a lot more testing. And, Dr. Doraiswamy said, “diagnosis rates, like testing rates, only go in one direction — up.”

Doctors will have to learn new terms — preclinical Alzheimer’s; prodromal, or early stage, Alzheimer’s. Patients going to see a doctor with memory problems might be offered biomarker tests, which can be expensive.

The ripple extends beyond doctors and patients, Dr. Doraiswamy said. The new diagnostic criteria also have consequences for lawyers, insurance companies and workers’ compensation programs.

And, he said, people have to be prepared for unintended consequences, which always occur when the diagnosis of a disease is changed. For now, he said: “We ought to be cautious that we don’t stimulate all this testing before we can give people something to manage their disease. There is no point in giving them just a label.”

Administration Issues Regulation on Pre-existing Condition Exclusion, Lifetime and Annual Dollar Limits, Rescissions, and Patient Protections

Issue:  Health Insurance Reform

Date: June 23, 2010

Action Taken: On June 22, the U.S. Departments of Health and Human Services (HHS), Labor, and Treasury issued interim final regulations implementing the rules for group health plans and health insurance coverage in the group and individual markets under provisions of the Patient Protection and Affordable Care Act regarding pre-existing condition exclusions, lifetime and annual dollar limits on benefits, rescissions, and patient protections.

NAIFA Position: In order to assist clients comply with the new market reforms, NAIFA members need to understand the new restrictions and their application to grandfathered plans. The following Q&A will help members and their clients comply with the new restrictions.

Pre-existing Condition Exclusions

Q: Are pre-existing condition exclusions prohibited?

A: Yes. The new law prohibits any pre-existing condition exclusion from being imposed by group health insurance and extends this prohibition to individual health insurance coverage.

Q: When does the pre-existing condition prohibition go into effect?

A: The prohibition is generally effective to plan years (in the individual market, policy years) beginning on or after January 1, 2014.  However, for enrollees who are under 19 years of age, this prohibition becomes effective for plan/policy years beginning on or after September 23, 2010.  

 Q:  Do grandfathered plans have to comply with the new pre-existing condition prohibition?

A:  A grandfathered health plan that is a group health plan or group health insurance coverage must comply with the prohibition against pre-existing condition exclusions. However, a grandfathered health plan that is individual health insurance coverage is not required to comply.

Annual and Lifetime Dollar Limits

Q: Are there annual and lifetime benefit limit restrictions?

A: The new law restricts annual and lifetime limits on the dollar value of health benefits for plan years beginning on or after September 23, 2010, and prohibits them starting in 2014.

Q: Do the annual and lifetime benefit limit restrictions apply to grandfathered plans?

A: They do apply to grandfathered group plans. Grandfathered individual market policies are exempted from the provision.

Q: Does the restriction on annual limits apply to health flexible spending arrangements (FSAs)?

A:  The annual limit rules do not apply to health FSAs.  FSAs are specifically limited to $2,500 (indexed for inflation) per year beginning with taxable years in 2013.

Q: Does the restriction on annual limits apply to Medical Savings Accounts (MSAs) or Health Savings Accounts (HSAs)?

A:  The annual limit rules do not apply to MSAs or HSAs. Both MSAs and HSAs generally are not treated as group health plans because the amounts available under the plans are available for both medical and non-medical expenses. And, annual contributions to these accounts are subject to specific statutory provisions that require that the contributions be limited.

Q: Does the restriction on annual limits apply to health reimbursement arrangements (HRAs)?

A: When HRAs are integrated with other coverage as part of a group health plan and the other coverage alone would comply with the requirements, the fact that benefits under the HRA by itself are limited does not violate the restriction on annual limits because the combined benefit satisfies the requirement.

Q: Do these dollar limit restrictions prohibit plans from excluding all benefits for a condition?

A: No, but if any benefits are provided for a condition, then the requirements of the rule apply. An exclusion of all benefits for a condition is not considered to be an annual or lifetime limit.

Q: May plans beginning before January 1, 2014 establish “restricted annual limits” on the dollar value of essential health benefits?

A: Yes. A transition approach may be adopted as follows:

• For plan or policy years beginning on or after September 23, 2010 but before September 23, 2011, $750,000
• For plan or policy years beginning on or after September 23, 2011 but before September 23, 2012, $1.2 million
• For plan or policy years beginning on or after September 23, 2012 but before September 23, 2014, $2 million

Q: What are essential health benefits?

A: The regulations defining essential benefits have not yet been issued. See FAQ #28.

Q: May a plan or issuer impose annual or lifetime per-individual dollar limits on non-essential benefits?

A: Yes. A plan or issuer may impose annual or lifetime per-individual dollar limits on specific covered benefits.

Q: Are there special allowances for limited-benefit medical plans (mini-med plans)?

A: Yes. The secretary of Health and Human Services is to establish a program under which the requirements relating to restricted annual limits may be waived if compliance with these interim final regulations would result in a significant decrease in access to benefits or a significant increase in premiums. Limited-benefit plan guidance is expected in the near future.

Q: What type of notice is required regarding changes to dollar limits?

A: Group health plan or insurers that offer group health coverage must provide written notice to plan participants that the plan’s lifetime dollar limits no longer apply. Participants must be given 30 days or more to enroll to receive coverage that employers would have to offer by the first day of the plan year beginning on or after September 23, 2010, which for calendar year plans would be January 1, 2011.

Rescissions

Q: When are plans prohibited from rescinding policies?

A: Group health plans and individual health policy rescissions are prohibited, except in cases involving fraud or intentional misrepresentation of a material fact, effective for plan years beginning on or after September 23, 2010.

Q: What is a rescission?

A rescission is a cancellation or discontinuance of coverage that is retroactive.

Q: Is non-payment a rescission?

A: A cancellation or discontinuance of coverage is not a rescission if the cancellation or discontinuance of coverage has only a prospective effect; or if effective retroactively to the extent it is attributable to a failure to timely pay required premiums or contributions towards the cost of coverage. While non-payment is not a rescission, it is an allowable reason for retroactive cancellation.

Q: What type of rescission notice is required?

In situations in which rescission would be allowed, group health plans or insurers would have to notify participants 30 days in advance.

Q: Are grandfathered plans prohibited from rescinding policies?

A: The rules regarding rescissions and advance notice apply to all grandfathered health plans, effective for plan years beginning on or after September 23, 2010.

Patient Protections

Q: Are there additional patient protections regarding primary care?

A: Yes.

• Any participating primary care provider who is available to accept the participant or beneficiary can be designated as the primary care provider.

• Any participating physician who specializes in pediatrics can be designated as the primary care provider.
• The plan may not require authorization or referral for obstetrical or gynecological care by a participating health care professional who specializes in obstetrics or gynecology.

Q: What notice is required if a plan requires the designation of a primary care provider?

A: If a group health plan or health insurance issuer requires the designation by a participant or beneficiary of a primary care provider, the plan or issuer must provide a notice informing each participant of the terms of the plan or health insurance coverage regarding designation of a primary care provider and of their rights to choose a any participating primary care provider or pediatrician and no authorization or referral is needed for obstetrical or gynecological care.

Model Language

[Name of group health plan or health insurance issuer] generally [requires/allows] the designation of a primary care provider. You have the right to designate any primary care provider who participates in our network and who is available to accept you or your family members. [If the plan or health insurance coverage designates a primary care provider automatically, insert: Until you make this designation, [name of group health plan or health insurance issuer] designates one for you.] For information on how to select a primary care provider, and for a list of the participating primary care providers, contact the [plan administrator or issuer] at [insert contact information].

For plans and issuers that require or allow for the designation of a primary care provider for a child, add:

For children, you may designate a pediatrician as the primary care provider.

For plans and issuers that provide coverage for obstetric or gynecological care and require the designation by a participant or beneficiary of a primary care provider, add:

You do not need prior authorization from [name of group health plan or issuer] or from any other person (including a primary care provider) in order to obtain access to obstetrical or gynecological care from a health care professional in our network who specializes in obstetrics or gynecology. The health care professional, however, may be required to comply with certain procedures, including obtaining prior authorization for certain services, following a pre-approved treatment plan, or procedures for making referrals. For a list of participating health care professionals who specialize in obstetrics or gynecology, contact the [plan administrator or issuer] at [insert contact information].

Q: What are the new emergency services benefits required for group plans?

A: If a group health plan, or a health insurance issuer offering group health insurance coverage, provides any emergency room benefits, the plan or issuer must provide coverage for emergency services in the following manner:

• Without prior authorization determination, even if the emergency services are provided on an out-of-network basis
• Without regard to whether the health care provider furnishing the emergency services is a participating network provider with respect to the services
• If the emergency services are provided out-of-network, without imposing any administrative requirement or limitation on coverage that is more restrictive than  the requirements or limitations that apply to emergency services received from in-network providers
• If the emergency services are provided out-of-network, by complying with the cost sharing requirements
• Without regard to any other term or condition of the coverage, other than:
  • The exclusion of or coordination of benefits;
  • An affiliation or waiting period permitted
  • Applicable cost sharing.

Q: How are cost-sharing requirements for emergency services determined?

A: Any cost-sharing requirement expressed as a copayment amount or coinsurance rate imposed for out-of-network emergency services cannot exceed the cost-sharing requirement imposed if the services were provided in-network. However, an enrollee may be required to pay, in addition to the in-network cost sharing, the excess of the amount the out-of-network provider charges over the amount the plan is required to pay.

A group health plan complies with the requirements if it provides benefits with respect to an emergency service in an amount equal to the greatest of the three amounts:

• The amount negotiated with in-network providers for the emergency service furnished, excluding any in-network copayment or coinsurance imposed with respect to the participant or beneficiary. If there is more than one amount negotiated with in-network providers for the emergency service, the amount is the median of these amounts, excluding any in-network copayment or coinsurance imposed. In determining the median, the amount negotiated with each in-network provider is treated as a separate amount (even if the same amount is paid to more than one provider). If there is no per-service amount negotiated with in-network providers (such as under a capitation or other similar payment arrangement), the amount is disregarded.
• The amount for the emergency service calculated using the same method the plan generally uses to determine payments for out-of-network services (such as the usual, customary, and reasonable amount), excluding any in-network copayment or coinsurance imposed. The amount is determined without reduction for out-of-network cost sharing that generally applies under the plan or health insurance coverage with respect to out-of-network services. For example, if a plan generally pays 70 percent of the usual, customary, and reasonable amount for out-of-network services, the amount for an emergency service is the total (that is, 100 percent) of the usual, customary, and reasonable amount for the service, not reduced by the 30 percent coinsurance that would generally apply to out-of-network services (but reduced by the in-network copayment or coinsurance that the individual would be responsible for if the emergency service had been provided in-network).
• The amount that would be paid under Medicare (part A or part B) for the emergency service, excluding any in-network copayment or coinsurance imposed.

Q: Are grandfathered plans exempt from the new emergency services rules?

A: These rules regarding emergency services do not apply to grandfathered health plans.

Additional questions are answered in NAIFA’s FAQ on the new law and quick look at the implementation of various provisions can be found in the timeline.

Next Steps:  The Departments invite comments from the public. Written or electronic comments and requests for a public hearing must be sent by September 27, 2010.

Please visit us at www.naifa.org/advocacy

National Association of Insurance and Financial Advisors, 2901 Telestar Court, Falls Church, VA 22042

Thanks to Anthem Blue Cross for this valuable information.

Bruce Kantor

www.KantorAndAssociates.com

“The recently enacted Patient Protection and Afforable Care Act could earn you a new tax credit this year for providing health insurance for your employees.  If your small businss or tax-exempt organization pays employee health insurance premiums in 2010, you may be eligible to claim a new credit on your 2010 tax return.  Employers with fewer than 25 employees (more if you have part-time employees) and less than $50,000 in average wages, may be eligible.

How much you may receive.  Eligible small employers could qualify for a credit worth up to 35% of premiums paid in 2010 (for businesses) or 25% of premiums paid (for tax-exempt groups(.

Tind out if you’re eligible.  Visit www.irs.gov or consult your tax professional to learn more about whether your small business qualifies for this valuable incentive to provide health coverage for your employees.”  This is Notice 1397 (4-2010) Catalog Number 54941Y.  Department of the Treasury, Internal Revenue Service”

The Health Care Bill will put a $2500 cap on FSA contributions and restrictions on using FSAs to purchase over-the-counter medicines. These restrictions are to take place next year. Currently there are no limits on these accounts which allow eligible persons to use before tax dollars to pay for medical expenses.

According to Jody Dietel, chief compliance officer at Wage Works, a San Mateo California company specializing in health care plan administration, this new provision represents a “Radical Change”.

Why do this when it makes medical care easier and less expensive for the average worker? The elimination is expected to net the government $68billion in additional revenue according to Ms. Dietel.

Another gotcha! Ms. Dietel notes the health care reform legislation also creates a 40% excise tax on flexible spending accounts that employers will have to pay if they offer an FSA to their employees.

“The excise tax is very problematic,” Dietel said. “If I am an employer, I am not going to pay a 40% excise tax to have a flexible spending account plan.

The above is thanks to Thomas Cheplick from Cambridge, MA

The president said that the new health care legislation would not cost anything? The above is an example of using smoke and mirrors.

The Community Living Assistance Services and Supports (CLASS Act) is a voluntary insurance program to facilitate community living services and supports. It will provide individuals with a cash benefit to purchase non-medical services and supports necessary to maintain community residence. It does not require them to become impoverished and turn to Medicaid to access these services

The program will be financed through monthly premiums paid by voluntary payroll deductions. Working adults will be automatically enrolled in the program unless they choose to opt-out. In an employer chooses not to participate, the working adult can enroll by another mechanism set up by the feds. Premium payments will be placed in a “Life Independence Account” on behalf of each eligible beneficiary and managed by the department of Health and Human Service as a new insurance program. The fact that the HHS department is going to manage these funds is enough to send shivers down one’s spine. Benefits would be paid out of trust fun consisting of enrollees’ premiums and interest earned on its balances. The amounts will be determined by the Secretary of HHS with respect to maintaining 75 year program solvency.

To qualify for benefits, individuals must be 18 years old and have contributed to the program for at least five years (SIC). Eligibility for benefits will be determined by state disability determination centers and will be limited to individuals who are unable to perform two activities of daily living or have a cognitive impairment. This limitation must be expected to last for 90 days. This is the same definition as a traditional long term care insurance Policy.

The individuals will receive a cash benefit based on the degree of disability or impairment averaging no less than $50 per day. The benefits are not subject to an aggregate maximum benefit. It is expected that an automatic increase benefit will be included.

The Congressional Budget Office, CBO, estimates that the CLASS Act’s net effect on the federal budget would be to reduce the budget deficit by about $74 billion during the 2010-2019 period. These estimates are based on an average premium of $123 and a cash benefit of $75 per day.

The CLASS Act would no replace the need for basic health insurance or for private long term care insurance.

My question would is, “How long with the congress allow money to accumulate at interest? Ask your congress person about the Social Security Trust Fund”.