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Benefits or Salary When Thinking About Leaving a Job?

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asalaryIf you’re considering quitting your job, it’s important to not only factor in the salary that you will be losing but also the benefits package.

Health insurance can be costly, and with unpaid medical bills being the leading cause of bankruptcy in the U.S., it’s not something you can afford to skip out on.

Before quitting your job, take a close look at what types of benefits you’re receiving, especially if you have a family, and make a decision from there.

Questions to ask about your current job

It’s not just a matter or whether or not your job provides health insurance, but a matter of how good it is.

Are your family members covered at an affordable cost? What type of plan are you covered under? What is your monthly payment compared to your deductible? In addition to health care coverage, do you receive dental and vision insurance?

And let’s not forget about sick time and vacation time.

Some companies offer a very competitive paid time-off plan, including holidays, sick time and plenty of vacation time. Is this something you’re willing to give up in addition to your salary and health insurance benefits?

Is Money Everything?

Most people are focused on their salaries. But, the reality is you can find a way to live off of a wide range of salaries.

If you do end up in a catastrophic situation without a good benefits plan in place, you will most likely go bankrupt even if you were making a decent living. Medical bills crush many Americans year after year because they’re not properly insured.

According to the article saving on family health insurance, it’s very rare that companies provide full benefits to employees and their dependents.

If you work for one of these one-of-a-kind companies, you’ll definitely want to think twice about quitting.

On the same token, some employers only offer plans to their employees and not to any additional family members. If this is the case, you’ll have to get your family members on a private health insurance plan of their own.

Is Work Benefiting You?

Though you do have to consider a wide array of things when looking for a job, including salary, benefits, paid time-off, expected weekly hours, travel and job duties, it’s safe to say that benefits should rank towards the top of your considerations.

Employers can pay anywhere from a few thousand dollars per year for an individual plan up to $15,000 per year for a family plan.

If you factor that into your yearly salary, you’re most likely getting paid a decent amount more than you thought. If your employer is also contributing to a 401(k) plan for you, that should be factored in, as well.

Quitting a job is a tough decision.

Many factors need to be thought about in-depth before a decision can be made.

Don’t think lightly about benefits, though, as good packages from employers can be extremely hard to come by.

Photo credit: Image courtesy of imagerymajestic at FreeDigitalPhotos.net

About the Author: Sarah Brooks is a freelance writer living in Charlotte, NC. New to the city, she enjoys spending time outdoors and exploring the area. She writes on a variety of topics including health insurance, small businesses and personal finance.

Making a Healthy Choice When It Comes to Insurance Plans

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ahealthcheckSmall business owners wrestling with the decision of whether to offer group health coverage to their employees have several more months before Obamacare’s small business insurance marketplace is fully operational.

Under the provisions of the Affordable Care Act, businesses with 50 or fewer full-time equivalent employees, or FTEs, are not obligated to provide such coverage for their workers.

However, many companies, both large and small, find they can better attract — and keep — top-quality employees if they offer health coverage as a benefit.

SHOP Postponed

The multiple problems following last fall’s launch of open enrollment for individual health coverage prompted the federal government to postpone for a year the opening of SHOP, known officially as the Small Business Health Options Program.

In the meantime, small businesses that want to move ahead with group health coverage can continue to purchase health plans that meet Obamacare standards from insurance brokers.

Also, businesses in states that have their own Obamacare exchanges can buy coverage in those marketplaces.

Guidelines for Eligibility

If you’re among the small business owners who are opting to wait until SHOP is fully operational, here’s what you need to know about the qualifications necessary for participation in the marketplace:

  • You must have a principal business address within the state where you’re seeking to buy coverage or have an eligible employee with a primary worksite within the state where you’re buying coverage;
  • You must have at least one common-law employee on your payroll other than the business owner, sole proprietor, or their spouses. A common-law employee is defined as anyone who performs services for you wherein you can control what will be done and how it will be done;
  • Your business must have 50 or fewer FTEs, including part-time employees, in order to be eligible to purchase health plans within the small business marketplace. Two part-time employees are equal to one FTE. A couple of years down the road, SHOP eligibility will be expanded to include businesses with 100 or fewer FTEs.

Pay o to 100% of Premium

Interestingly, small businesses that purchase health insurance plans through SHOP are not required to pay any of the premiums for such coverage, according to a Forbes analysis of small business options under Obamacare.

Employers can pay anywhere from 0 to 100 percent of the plan’s premium, and employees must pay the rest. This rule applies only to health insurance plans purchased through SHOP, which is the federal marketplace for small businesses, and is not necessarily applicable to coverage purchased through state-operated exchanges.

For example, employers purchasing coverage through California’s state-operated exchange must pay at least 50 percent of the premiums for such coverage.

No matter whether you plan to pay 100 percent, 50 percent, or none of the premiums for health coverage offered to your employees, there’s a significant tax benefit to buying through SHOP.

Premiums for all such plans are paid with pre-tax dollars. This means that whoever pays the premium — employer, employees, or both — gets a nice tax break.

Control the Coverage

Choosing a health insurance plan from SHOP allows the small business owner to control the coverage that is offered to employees and, as we’ve already seen, to decide how much, if any, to pay toward employee premiums.

If your small business has 25 or fewer FTEs and you decide to pay 50 percent or more of the premiums for health plans purchased from SHOP, you may be eligible for a small business tax credit for the premiums paid.

In order to be eligible for this tax credit, your employees must average less than $50,000 per year in annual wages. Forbes reports that many employers that are eligible for this tax credit are forgoing it because the calculations involved are “slightly cumbersome.”

4 Levels of Coverage

As a small business owner, you can select the level of coverage that will be available to your employees.

As for individual health plans, the four main levels of coverage are Bronze, Silver, Gold, and Platinum.

According to HealthCare.gov, these categories have nothing to do with quality of care but rather describe “the way your employees and the plan can expect to share costs for health care.” In other words, bronze plan coverage would require a higher copay for health services than would be charged under the other metal categories.

HealthCare.gov points out, however, that all plans available through SHOP must provide a set of essential health benefits.

Such benefits include ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, prescription drugs, rehabilitative services, laboratory services, preventive and wellness services, and pediatric services.

When evaluating health insurance plans in SHOP, you can compare side by side what services are available under the four levels of coverage.

As noted above, all must provide for the essential health benefits, but higher level plans are likely to have additional benefits.

And, of course, higher level plans cover more of the costs of services and thus have lower copays, if any.

Photo credit: Image courtesy of Vichaya Kiatying-Angsulee / FreeDigitalPhotos.net

About the Author: Don Amerman is a freelance author who writes extensively about a wide array of business and personal finance topics.

Save on Taxes by Making Wise Choices During Open Enrollment at Work

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By Sharita Hutton

When it comes to tax-deferred accounts for health expenses, most taxpayers get it all wrong. A recent Fidelity survey shows that nearly 3 in 4 incorrectly think employer-provided health savings accounts and flexible spending accounts are virtually the same thing. H&R Block (NYSE: HRB) knows this misunderstanding causes many to miss out on a chance to pay less in taxes because contributions to these accounts are not taxed. Before checking off the same boxes they do every year during open enrollment for health benefits at work, taxpayers who have access should consider these accounts.

How much money? A $2,000 annual ($166 monthly) contribution to health savings account or a flexible spending account could save a taxpayer in the 25-percent tax bracket $500 in taxes (contribution × marginal tax rate = tax savings).

The money contributed to either type of account must be spent on qualified medical expenses, which include eyeglasses, contact lenses and prescribed medication. Also, appointments with doctors – for general preventative checkups, appointments with specialists and visits when not feeling well – are among the eligible expenses. All these routine expenses can add up quickly; out-of-pocket costs for a family of four were expected to average $3,600 in 2013, according to the 2013 Milliman Medical Index.

Not going to the doctor when sick could save money, just like wearing outdated prescription glasses and only taking half as much medication as prescribed, but none of these are advisable ways to save on health care expenses. Here is some information taxpayers can use to determine if a health savings account or a flexible spending account could help them save money.

Health savings account gives opportunity for long-term saving

As with other savings accounts, the money in a health savings account can stay in the account indefinitely, allowing the account holder to save for future medical needs. Funds used for qualified expenses can be withdrawn tax-free, and interest earned on the account is tax-exempt. Here are some of the participation rules:

The taxpayer must participate in a high-deductible health plan

  • High-deductible is defined as at least $1,250 deductible for self-only coverage and $2,500 for a family
  • Plan must not pay benefits until deductible is reached

(There are exceptions for preventive care and certain permitted benefits, such as dental expenses)

The maximum contribution for 2014 is $3,300 for self-only coverage and $6,550 for a family

  • An additional $1,000 may be contributed for taxpayers who are at least 55 years old.

Flexible spending account money must be used by deadline or it will be lost.

Unlike with health savings accounts, the money contributed to a flexible spending account must be used by the end of the plan year or grace period, or it will be lost. Up to $2,500 may be withheld from gross income for contributions to flexible spending accounts.

Just like other elections made during open enrollment for benefits, decisions about these accounts cannot be changed before the next annual enrollment period, unless an employee has a qualifying event. Among qualifying events are birth, divorce, marriage, death and loss of benefits from another source (e.g., a spouse losing a job).

Some retirement options selected during open enrollment also have pre-tax benefits

Another option for pre-tax savings that happens as part of open enrollment in the workplace is selecting retirement savings plans. The average retirement span is 18 years and 80 percent of people ages 30-54 don’t think they will have enough money put away for their retirement. A good first step in saving for retirement is to make pre-tax contributions to a 401(k). Because these contributions are made with money that has not been taxed, the amount contributed reduces taxable income and that can potentially reduce the overall tax bill. Also, retirement savings grow tax-free.

For more information about health savings accounts and flexible spending accounts, saving for retirement or advice on other ways to reduce tax liability, contact an H&R Block tax professional. To find the nearest H&R Block office, visit www.hrblock.com or call 800-HRBLOCK.

It Pays Off to Find the Right Payroll Outsourcing Firm

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If you own a small business, you undoubtedly find yourself with not enough time in the day to get everything done. As a result, attention to detail must be focused on the most important tasks at hand in order for your business to run smoothly.

So, where does paying your employees (where applicable) sit on that list of required items at your company?

One way to keep employees happy and giving you their best effort is to make sure they are paid properly and on time. If their payments are miscalculated and/or late, their desire to put in a good day’s work can seriously be impacted.

In order for the busy small business owner to meet this need, that sometimes means going outside their own office and hiring a payroll outsourcing firm, giving the business owner one less important responsibility to handle.

If you find yourself in this position, what are some things that should come into play when you discuss doing payroll in-house or outsourcing it?

Among the areas to focus in on include:

* Provider background – Just as you would spend the time to research any business you work with, extra attention should be given to any payroll providers you consider. Check to see their track record of working with other customers, if they have any history of complaints against them, and if they are financially stable. It is a good idea to get some referrals from other small business owners using such services that you are friendly with;

* Time saved on the job – If you got outside your company with payroll duties, you free up time for the individual or individuals (typically the HR department) who had previously handled this responsibility. When that is the case, that person or persons can then assist you with other duties. It also removes the pressure from such individuals for properly calculating pay, taxes to be withdrawn, and any benefit issues that can typically arise with payroll, including deductions towards health insurance and 401k plans;

* Taxes do matter – Especially in cases where you are outsourcing payroll, make sure you deal with a company that gets it when it comes to taxes. It is not at all uncommon for small businesses to get a letter in the mail from the IRS, specifically stating that they did not calculate their taxes correctly when doing payroll. When that happens, the company is subject to a potential financial penalty. You will also want them to handle preparing W-2s and 1099s at year’s end. Finally, make sure the payroll provider is bonded, meaning your small business has protection from liability when finances are incorrectly reported;

* Employee security – If you turn to payroll outsourcing, make sure they can promise security for you, specifically involving employee data. Information such as how much the worker is being paid, their Social Security number, home address etc. need to remain confidential. If you are transmitting the information via fax machines or even a computer software program, it is important to confirm that the data will be properly protected;

* Up to date with benefits – You not only want a payroll provider who can properly and efficiently handle payroll and taxes, but one that is also up to speed with requirements regarding things like health benefits and 401k plans. Some or many of your employees may be eligible to participate in both, so it is important that the correct amount of money is deducted each pay period for such items;

* Terms of contract – Lastly, make sure you have in writing exactly how much it will cost for the payroll provider to handle your needs. Will you have a one-year contract with them or a longer-term one? When trying out a new provider, it is wise to go with a shorter term deal so you have the ability to see what you do and do not like about their services.

As you head into the New Year, consider working with a payroll provider if you find doing payroll in-house is getting to be too taxing.

If it is, it pays to take the time and find the right payroll provider the first time around.

Photo credit: smallbusinessbranding.com

Dave Thomas covers small business topics for various websites.