Recent changes in benefits administration law have made outsourcing payroll even more attractive to companies.
The American Recovery and Reinvestment Act of 2009, commonly referred to as the Economic Stimulus Bill, was signed into law on February 17, 2009 by President Obama This law contains several significant changes which will directly affect employers and how their benefits are administered.
First, a Temporary COBRA Premium Assistance has been included in The American Recovery and Reinvestment Act. This COBRA Premium Assistance provides a subsidy of 65% of the cost of COBRA coverage for nine months to certain individuals. The subsidy’s provisions are effective immediately and plan sponsors must comply with them now. The number of participants in COBRA plans will dramatically increase over the next 24 months for the following reasons: 1) Unemployment rates are now at 7.6% and growing 2) The new stimulus act helps pay a significant portion of the employee COBRA contributions. The IRS has made reacting to the much more onerous COBRA provision contained in the new law a top priority. As the number of participants grow, more businesses may be interested in choosing to outsource this as the work and liability tied to it will increase exponentially.
Some larger national payroll processing services companies administer COBRA, while most local ones don’t. Utilizing your payroll services COBRA administration has certain advantages over using your health carrier’s: a health care provider may just provide COBRA for their specific health plan, but not include other eligible services, such as Dental. By choosing your payroll outsourcing services provider to administer your COBRA benefits, you will eliminate the burden of administering ALL eligible COBRA benefits, not simply health. In addition, some larger or multi-state companies may have several health insurance choices; relying on your payroll outsourcing services provider to administer COBRA eliminates this conflict.
Second, The American Recovery and Reinvestment Act contains a “Making Work Pay” Tax Credit, which will be achieved through payroll deductions: 1) The credit amount will be the lesser of $400 for an individual worker ($800 for married couples) or 6.2% of earned income 2) The credit would phase out for taxpayers with adjusted gross incomes in excess of $75,000 ($150,000 for married couples filing jointly) 3) The IRS indicates that the credit will be achieved via a early to mid year change to withholding tax tables 4)The credit will be in effect for tax years 2009 and 2010
By: Suzanne Burnham
Posts Tagged ‘Specific Health’
Key Provisions in the Economic Stimulus Law Make Payroll Outsourcing Services More Attractive
February 28th, 2010Jobs in the Health Care Industry in the United States
December 16th, 2009
Hi, and welcome to what will probably be many articles about careers in the healthcare industry. This article is designed to give you an overview of the basics of the somewhat embattled US healthcare system. This is not an exhaustive review of the entire industry, but it should give someone who is considering jobs in health care a leg up.
In the US, a diverse selection of individuals and legal entities pay for health care- patients are offered both inpatient and outpatient services by charitable, commercial, or governmental entities. The healthcare system is funded by a mix of public and private funding, with the government picking up about 45% of the total annual cost.
Another example of a health care facility would be a specialty clinic such as a surgical center, whereby patients can have surgical procedures that don’t require a hospital stay performed at their convenience. There are also hospice services, usually provided in the home to those expected to live less than six months; these services are usually funded by charities or the government. There are also other specialty clinics where patients receive care, such as prenatal or family planning clinics which are usually funded by the government and staffed by nurse practitioners.
A small segment of the population (about 9%) chooses to purchase individual health care insurance. The government covers about 80 million Americans, but in the year 2006, approximately 47 million people did not have health insurance at all. 37% of the uninsured live in homes that have annual incomes of over $50,000.
Most health care coverage provided through a person’s work is provided through managed care organizations which pay much lower prices for medical services than an individual would if they paid out of pocket. The thing that makes managed care different from traditional insurance is that the health plan organization has contracts with specific health care providers, as the managed care organization is able to bring their numbers to bear to negotiate price reductions.
There are many individuals that are not covered by private insurance, but are covered by government programs such as Medicaid (which provides care to the poor), Medicare (which provides care for the elderly and disabled), or the Veterans Administration (which provides care to veterans, their families and survivors). In 2006, Medicaid provided coverage for 38 million Americans while Medicare did the same for about 40 million. Another 11 million people are eligible for coverage but are not enrolled in any kind of government program.
The number of physicians accepting Medicaid has decreased over the past decade due to high administrative costs and low levels of reimbursement. Another program, the State Children’s Health Insurance Program was created in 1997 to provide coverage for children in families that earn too much to qualify for Medicaid yet can’t afford to buy health insurance- however, this program is already losing funding in may states.
As you move forward in your career, only you can decide if the health care industry is right for you. Be vigilant, don’t get discouraged- and you will find the jobs in health care you’re looking for in no time at all!
By: Jonathan Duarte
