New to Health Savings Accounts?
by GLJ Team on 01/30/12
What is a Health Savings Account or HSA? A Health Savings Account or HSA is a High Deductible Health Plan (HDHP) that works in conjunction with a savings account.
Open the Savings Account. Once you have an HDHP, you will need to open the actual savings account at any financial institution. Deposits are Tax Deductible and withdrawals are Tax Free if used to pay for medical expenses. Annual contribution limits are regulated by the IRS. For 2012, the IRS has set the maximum contribution to a savings account for an individual at $3,100 and for a family at $6,250.
Tax Savings without "Itemizing". A health savings account (HSA) is a tax-favored savings account created for the purpose of paying medical expenses.
1. Tax-deductible Contributions to the HSA are 100% deductible (up to the legal limit) -- just like an IRA.
2. Tax-free Withdrawals to pay qualified medical expenses are never taxed.
3. Tax-deferred Interest earnings accumulate tax-deferred, and if used to pay qualified medical expenses, are tax-free.
4. HSA money is yours to keep Unlike a flexible spending account (FSA), unused money in your HSA isn't forfeited at the end of the year; it continues to grow, tax-deferred.
How does the new Health Care Reform law affect HSA's? The near-term impact on HSA's is limited to (1) an increased penalty on HSA distributions that are not used for qualified medical expenses for those under the age of 65 from 10 to 20 percent and (2) the exclusion of most over-the-counter medications as a qualified medical expense unless they are prescribed by a physician.
For More Information. If you would like to learn more about the benefits of HSA's and the options available to you, contact our office at 480.892.8826 and ask to speak with a Health Savings Account Specialist.
About the Author: Samantha Nelson has worked at Garry L. Johnson & Associates as a Group Benefits Account Representative for the past 5 years.
Blended Group and Individual Disability Insurance Seen as Linchpin for Highly Compensated Employees' Financial Protection
by GLJ Team on 01/25/12
There has never been a more critical time to raise the bar on income protection, particularly for professionals and highly compensated employees. Why? Most group long-term disability (LTD) plans typically replace just 60% of base salary, up to a maximum monthly amount, before taxes. Left off the table is incentive compensation, bonuses and retirement plan contributions -- all of which can add up to a substantial sum of money. In effect, the result is underinsurance and reverse discrimination for people whose income exceeds $75,000 to $100,000.
One reason for this sense of urgency is that the U.S. economy has been stuck in neutral for the past several years, fueling unemployment, benefit cutbacks, stress and health care costs. Housing and most personal financial investments have still not recovered, and in many cases, are still on the decline. As true today as ever: the most valuable asset an individual has is their ability to earn an income.
The risks are real
Another factor employees need to consider is that in order to remain productive, they also have to remain healthy. Unfortunately, employees are more vulnerable to injuries and illnesses that cause them to miss work than they may think. Common afflictions include neck and back pain, as well as a host of disorders involving joints, tendons, feet, ankles and hands, not to mention cancer, cardiovascular diseases, stroke and behavioral health conditions.1
"Just over one in four of today's 20 year-olds will become disabled before they retire2," says Ray Marra, Guardian's vice president for group insurance products. "It is a very staggering number. Many of us think we're invincible. What's more, most disabilities suffered are not work-related, particularly in the case of white-collar employees, so workers' compensation can't help."
The majority of working Americans (82%) worry about paying living expenses if they become disabled3 -- a perfectly understandable fear, since an employee's entire financial plan can unravel without adequate income protection. Those who are living from one paycheck to the next are, of course, most at risk. However, even many financially secure individuals do not have enough income or savings to withstand more than six months of being away from work, explains Marra.
The answer to this dilemma is a complete fully integrated approach to help ensure that you protect yourself completely from this potential risk. There are solutions. You can do something about this for you and your employees.
We recommend that you contact our office today for our help in providing a financial check-up for yourself or your company and employees.
Are you covered where you need to be? Prepare, Protect, Preserve your today and your future. Call us today.
About the author: Alan Wilson is an Employee Benefits Specialist at Garry L. Johnson & Associates and works with National Organizations and Insurance Carriers in designing Outstanding Employee Benefit Solutions. alan@gljinsurance.com
1 Social Security Administration, Fact Sheet March 18, 2011.
2 The 2010 Council for Disability Awareness (CDA) Long-Term Disability Claims Review.
3 Council for Disability Awareness Worker Disability Planning & Preparedness Study, 2008.
4 Excerpts also from Bruce Shutan article which appeared in an October 2011 Employee Benefit Advisor Newsletter
Finding a Long Term Care Policy that Works for You
by GLJ Team on 01/13/12
As a large portion of the population -- the baby boomers -- have begun to move into their senior years of life, Long Term Care Insurance (LTCI) has become a popular topic. With many types of LTC plans to choose from, choosing the right plan to meet your needs or the needs of a loved one can become a very wearing experience.
I recently came across this article online discussing some of the obstacles you may run into and some options you should look for when trying to decide on an appropriate LTC plan: Long Term Care for Aging Americans.
At GLJ Insurance we have the experience and knowledge to provide you with coverage options to help meet your needs at a price that can be incorporated into your budget. There are many factors to consider in making a decision on LTCI, GLJ is here to help answer questions and provide options so you can make an informed decision.
"Garry L. Johnson & Associates exists to help create, build and protect your family security and financial legacy."
About the Author: Steve Fort has been a Consultant at Garry L. Johnson & Associates (GLJ Insurance) for the past 12 years.
