What,amp,#39,New,Small,Busines business, insurance What's New in Small Business Benefits Plans for 2002


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This is a great year if you are self-employed or work for a small business. A number of new money-saving strategies are available to cut income taxes, medical costs, insurance costs and investment fees.PPO BENEFITS EXPANDED - All U.S. short term medical plans now offer the option of utilizing a nationwide Preferred Provider Network (PPO) for discounts and claim processing. The PPO network is PHCS, recently listed as the highest rated private PPO plan by Consumer Reports Magazine (Oct. 2001). Previously this benefit was only available on more expensive permanent health plans but now is attached to the most affordable health insurance plans. This means that there is no longer any need to manually submit claims when using a participating provider. Claims are automatically submitted by the participating provider. This also means that members will receive a cash savings from their health plan even if total medical expenses do not ever reach the policy deductible. This is an optional feature; the policies still cover services from all medical providers nationwide and in Canada.MSA INVESTMENT OPTIONS EXPANDED - Self-directed Medical Savings Account plans with balances over $1000 may now be invested in virtually any investment the same as a self-directed IRA account. There are literally thousands of investment possibilities for every plan participant. MSA health plans are now available in most states, but they are priced attractively to only about 40% of small businesses nationwide.THE FIRST NO-FEE 401(k) PLANS - Thanks to the most recent tax law changes combined with the cost efficiency of Internet-based financial service providers, now any business can offer a 401(k) at no cost to either the employer or the plan participants. Even sole proprietors are eligible. In most cases small businesses with other types of retirement plans – especially SEP, SIMPLE, SARSEP – should now consider switching to a 401(k). These plans utilize entirely online account administration giving 24/7 access to your investment account.Note that the term "no fee" means that there is no setup fee and no administration fee for a 401(k) plan itself. The plan participants may freely elect to place their money in some investments that have their own separate charges. Also, employers or individual plan participants may want to purchase supplemental financial planning services to help make better tax and retirement planning decisions when enrolling in a 401(k) plan. IRS SUBSIDIZES SOME BENEFIT COSTS - The IRS offers a tax credit to low and modest income individuals who make retirement plan contributions. Also, businesses may claim a tax credit for the cost of setting up an employee retirement plan and educating employees on how to best utilize it.MAXIMUM COST CAPPED FOR GUARANTEED ISSUE HEALTH PLANS - Most states have enacted laws that cap the maximum cost of a guaranteed issue small business health plan at 67% more than the cost for standard risks. To be eligible, a business must have a bona-fide payroll as evidenced by a copy of a state unemployment tax return. This can result in substantial savings if an employer with unhealthy members needs to switch health plans. This benefit is currently effective in 37 states.LIBERALIZATION OF RETIREMENT PLANS - You can do more with your pension, 401(k) or IRA than ever before. The contribution limits are higher, loan provisions are easier, and withdrawal & rollover allowances are now more flexible. Whatever you want to do with your retirement plans, most likely there is now an easier way to get it done.

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