Health Savings Accounts Should Be Available to All Americans

All Americans should have the right to save for current and future healthcare expenses with pre-tax dollars. Health Savings Accounts provide some Americans with precisely that opportunity, but it is too limited in its scope to benefit the majority of the US. I love the concept of Health Savings Accounts (HSA), if you’re not familiar with them they are savings accounts in which money can be put away for future medical expenses on a pre-tax basis. In order to be eligible for an HSA you must be covered under a qualifying high deductible health insurance plan (HDHP). These are health insurance policies that typically cost less because they require their holders pay a high deductible (typically greater than $1000 annually). Unfortunately, the eligibility requirement to participate in a health savings account precludes the majority of the population from receiving a privilege that should be as basic as saving for one’s own retirement.

In a recent response from my Congressman, he suggested I consider using a sister product, the Flexible Spending Account (FSA). Although beneficial, the benefits of an FSA fall short of the benefits in an HSA; primarily because the balance of unused money in an FSA expires annually where an HSA rolls over from year to year. This is a monumental difference. With an HSA I have a means to cover current and future medical expenses which can accumulate to a retirement vehicle which becomes available for any purpose at age 65.  The rollover benefit becomes an even greater benefit when you consider the funds in Health Savings Account are eligible to pay the premiums on Cobra. Contributing to an HSA provides financial resources to use should one lose their job. Americans can use their HSA to pay the necessary 102% of their health premiums through COBRA or they may roll the money into a less expensive high deductible health plan (HDHP) with the resources to meet the high deductible.

Let’s look at a couple of case studies.

Dick and Jane

Dick and Jane are engaged. Jane has been submitting $2600 into and HSA for the past five years. During that time she has only consumed $1600 in health care costs that means Jane has been able to build up a health nest egg of $11,400. After they are married Dick begins carrying Jane as a dependent on his health care plan which does not qualify as a high deductible health care plan. Under current laws, Jane would be forced to discontinue contributing to her HSA, but it if all Americans were eligible for this savings incentive she wouldn’t have that problem. Instead they could increase their contribution $5,150. After a year, Dick may lose his job, but the family has been able to save $16,550. Their healthcare nest egg provides Dick and Jane with additional options. They may select to continue their current coverage through COBRA or they can select an alternate health care option. If COBRA were to cost $400 a month they can utilize their HSA funds. With these funds they would have the means of paying for coverage for 41 months. They could also choose to purchase independent health coverage. Their $16,550 nest egg minimizes their risk on a high deductible healthcare plan. They could conceivable absorb a $10,000 deductible and reduce their monthly payment to about $200, or half the cost of their cobra payment.

Scott and Laura

In the scenario of Scott and Laura, Scott is a severe asthmatic. His condition leads to a hospital stay about once a year costing about $3000. He must also have continuing medication at a monthly cost of $112. Scott and Laura are both on her employer’s group health plan. They pay $112/month with a $500 deductible and a 20% coinsurance. Their annual healthcare responsibility is approximately $2610 with insurance or approximately $4340 without insurance. Their insurance saves them approximately $1700 annually from paying full price on their medical care. Their FSA saves them about 20% (their tax bracket) on their prescription charges. Because Scott and Laura will lose the money in the FSA if they don’t spend it by the end of the year, they only save the cost of Scott’s prescriptions. Now, if Laura loses her job their healthcare future becomes much less secure because Laura’s plan was not HSA eligible, they do not any residual savings from their health care expenses nor were they granted guaranteed tax savings from their medical expenses. If they keep the medical insurance they clearly need through COBRA they now need to pay $400/month. These annual premiums total $4000 alone meaning that Scott and Laura only save about $340 a year by having health insurance. This does not include the cost of any of the co pays. Keeping the insurance could increase their medical expenses to about $6000 a year or $550/month at a time when the family income has been reduced. Scott and Laura have a very difficult choice to make in regards to their healthcare. Should they continue with coverage or should they let the family health insurance lapse?

Had they been able to contribute to an HSA, their scenario may have looked a little different. Scott and Laura would still have the same policy but chose to contribute the maximum allowable to their HSA. From the $5150 they withdrew $2610 for healthcare expenses leaving $2540 to accumulate over for the next year. Over the course of 5 years they have accumulated $12700 in the HSA. If Laura loses her job their options look much more promising. They can more easily absorb costs of COBRA and provide for the costs of their existing coverage for their entire 18 month term of eligibility. By making wise decisions in time of plenty, Scott and Laura would be able to prevent financial devastation or public dependence in the future and still provide the means to maintain their health needs. All health consumers should have the option to participate in an HSA and receive the corresponding tax benefits. The opportunity to participate in an HSA should not be tied to a high deductible health insurance plan. As it is written an HDHP with an HSA discriminates against most Americans, namely, consumers whose employers don’t offer a qualified high deductible healthcare plan and those who may have regular health needs which require a more generous health plan including young families who may need maternity or well child care.

Ironically, those ineligible to participate are doubly discriminated against. Not only do they lose the opportunity to financially prepare for the future healthcare needs, but it actually results in having higher healthcare costs. Here’s how:

1. High deductible health care plans often attract the healthiest segment of society, and when you remove the healthy consumers from the general insurance pool, rates rise to cover the lost revenue and higher payout per consumer.

2. Non participants must pay deductibles and uncovered health care from post tax dollars or they must try to forecast their annual health expenses through a flexible spending account (FSA). If they underestimate, they are again paying for expenses with post-tax dollars and if they overestimate they lose the unspent balance.

3. Individuals who have continuing healthcare needs are at the mercy of their employer for continued coverage. The loss of employment often means the loss of health care and can bring great personal risk and financial hardship.

By eliminating the requirement that an individual have a HDHP plan, you open the door for many more participants. These are people who need to hedge against risk in their health and financial well-being. When you allow people to pay their insurance premiums with their HSA, you grant them a means of planning for their health future, without discriminating based on their health care needs. Nationally, you increase the savings rate, sending more money into banks, and driving down your uninsured among the unemployed. Fewer people are dependent on government healthcare subsidies because they were able to plan during times of plenty. You open a door for increased retirement savings and, by giving people access to their funds when healthcare is needed, you limit some of the draw on government resources because they don’t end up on state sponsored plans.

10 Questions Small Businesses Should Ask When Hiring An IT Service Provider

Based on the premise that small- and medium-sized businesses oftentimes lack specific criteria to go by when seeking to hire an IT services provider for their everyday Information Technology needs, the following list is a handy “cheat sheet” that addresses 10 main questions businesses should ask a potential IT service providers when seeking and comparing IT services:

1) What specific hardware and software products, packages, and offerings does your IT company provide or resell that would make our business more effective and productive?

  • For example, if you’re a small business, certain phone systems will work better, and are licensed to work better for, small businesses of approximately 100 employees or less. Some even have constraints down to 50 employees or less or have constraints about how many locations they can service at once. Once the potential IT service provider tells you of the specific products they resell or offer, do your own online research and find out what the world wide web has to say about the differences between major communications companies and the appropriateness of their products for certain business sizes. Some communications product providers have initially aimed their products towards large-scale businesses and may only now be breaking into the realm of providing products that meet the needs of small and medium business. Each product, whether it’s a VoIP phone system or data backup hardware, has clearly stated constraints for number of users and business size before more upgrades or additional licensing are required. You’ll be in the know ahead of time, before hiring an IT service provider, if you “do your homework” on the products they intend to resell to you.

2) Of the services, hardware, and software you’ll be providing, will any of them actually lower our Total Cost of Ownership (TCO) in the short-term or the long-term? If so, how?

  • For example, installation of a new VoIP phone system may certainly produce a high initial cost, but when you consider that once installed, the new internet-protocol phone system will save hundreds, if not thousands of dollars in long-distance calling fees and between-site calling fees, that initial cost may be well worth the long-term savings. Moreover, new mobile phone apps and other unified communications methods and media are currently changing the way small and medium business do business by allowing your office phones to be duplicated on your mobile phone as if you’re never out of the office, or by streamlining your overall client communications to come to one place, saving you time and money, especially if your business requires you to be out of the office, in the field, or traveling often.

3) What is your fee structure and how is it advantageous to my small- or medium-sized business?

  • Fee structures come in many shapes and sizes, and those that are right for large enterprises are most often not right for small- and medium-sized businesses. While buying into an “incident-based” fee structure may be tempting in that you only pay for each occurrence of an IT problem, the unfortunate backlash of that fee structure is that, in their own attempts to make more money, some IT service providers may not create a solution that is a long-term fix for your problem. In fact, the IT provider may purposely only do enough to solve or “work around” the problem in the moment of the incident instead of creating an IT environment that prevents future incidents. In other words, on an “incident-based” fee structure, an IT company is actually monetarily encouraged to fix problems in pieces and not as a whole so that there’s another future incident waiting just around the corner that the IT company can be additionally paid for at a later date. This point begs for an answer to the next question:

4) Is your approach to IT solutions a reactive or preventative approach? Is it your approach to deal with our IT issues separately as they arise or to deal with our IT issues holistically?

  • A move within the IT industry from “a la carte” problem fixing to holistic solutions begs the question of whether an IT service provider is simply a reactionary entity that comes to fix problems as they arise or if they’re looking at the “big picture” of your business’s IT needs. Instead, many IT service providers and savvy businesses today are realizing that cost savings increase when the IT needs of a business are examined and troubleshot as a whole, preventatively. As a simple example, instead of performing data recovery after the crashing of one employee’s computer, a holistic IT company would have saved time and money by creating a monitored data backup plan with the hardware and software to perform backups well before someone’s computer crashes. As another example, instead of upgrading a business’s network whenever the size of the company increases due to a few new hires, a holistic approach would examine the projected growth of the company and request to implement network changes that can handle the growing workload before multiple potential hires are officially working and before company growth becomes a network-overload issue. A holistic approach does require though that an IT service provider conducts periodic assessments of things like how well your servers are functioning, how overloaded your network is or isn’t, and whether security and data backup practices are continually effective.

5) How will you solve IT issues that need immediate fixes before downtime negatively affects my business? Will you be responding remotely? If so, what happens when a remote fix is found to not be possible? Do you have someone in our local area that can respond on-site if necessary?

  • An IT service provider’s reaction time is crucial to your business experiencing as little downtime as possible. While remote fixes to your computers and your networks are often a cost-efficient solution for both your business and for the IT service provider, if there’s a server issue, you may oftentimes be in need of an IT professional that can be on-site to fix the problem hands-on. For businesses like stock brokers that use their computers to conduct real-time monetary transactions on a daily basis, excessive downtime can lead to a large loss of profit on behalf of clients that can then become upset and question your business’s validity. Avoid this problem by having a plan with your IT service provider ahead of time that notes exactly how much reaction time will be allotted for. If your IT company cannot be on-site within, say, an hour, you may want to consider another provider that can be there even quicker. This would mean contracting for services with a local IT provider, or at least contracting with a distant IT provider that has service professionals in strategic cities that are either close to or within your city.

6) How will productivity and cost-savings be shown? Is your IT company able to quantify the gains created by changes you’ve implemented within my business?

  • A periodic report sent either electronically or on paper, should be something your potential IT service provider can produce without a lot of effort. That’s because if they’ve chosen the proper products to boost the productivity of your business, and they’ve taken an initial baseline of the business’s productivity, quantifiable gains and losses should be easy to illustrate in a “productivity report.” This means a report that will answer questions like: how much faster is the server working after our recent upgrade? How much money are we saving per month now that we’ve upgraded to a VoIP phone system? How much faster is the website loading now that we’ve addressed latency issues? How many more calls can our business receive and handle simultaneously now that we’ve added more phone lines? How much more protected from outside and inside security threats are we now that we’ve implemented network security products and building surveillance cameras?

7) How are data backups implemented by your IT company? Do you provide emergency monitoring of our servers and networks? What happens in the case of a security breach?

  • A reputable IT service provider will be wise to perform periodic assessments of data backup systems and actually verify that those backups are working by attempting to retrieve random sets of data in a real-life application, such as pulling up accounts payable documents from three months ago and seeing if they can be opened without incident on an accounts payable employee’s computer. If the files are backed up but won’t convert to data that’s readable (i.e., if it reads as coded nonsense), then that’s a sign that data backup may be being performed but may not be accessible or usable when retrieval actually needs to occur. In addition, your networks, servers, and even your business’s buildings aren’t only under threat during business hours, so many IT providers provide 24/7 monitoring that shows up on an “on-call” IT phone that gets handed off between knowledgeable IT employees who can be “on call” throughout the night and respond quickly even if a server fails at 3am.

8) How does your IT company ensure the internal and external security of our networks, our websites, our VoIP phone system, our online admin areas, our passwords, and our building?

  • Though all of these security services may not apply to your small- or medium-sized business, those that do beg these important security questions. Proficient IT service providers can easily answer all of these questions by sharing with you what products and methods they implement in order to uphold the security of your business. They may recommend high-resolution security cameras, policies that ensure only administrators have access to crucial areas of your network, methods of storing passwords that aren’t on a sticky note in someone’s desk, and of course, firewalls and security software that ensure your website is hacker-proof. If the IT service provider you’re interviewing doesn’t have a quick, tried-and-true solution to your specific security needs, you’re better off finding a provider that does.

9) What certifications, qualifications, and most importantly, what experience does your IT staff have that will benefit my company?

  • While a common standard of having Microsoft and phone-system-brand certifications is common amongst the staff of many IT service providers, the real question is if any of the IT service provider’s employees have gone above and beyond to obtain not-so-common certifications and qualifications that make that IT service provider more of an expert in certain areas than the next. More importantly though is whether their experience matches and goes beyond their certifications. An IT professional going through a training course to obtain a certification is great, but oftentimes applying that knowledge in the field is a whole different ball game. Many IT service providers have decades of combined experience amongst their employees and have also kept current on applicable certifications, which is the type of pairing of education and experience to look for. If your server goes down, you’ll want an IT professional responding that fixes serves all the time, not one who’s checking his textbook for the next troubleshooting step.

10) Probably the most important question to ask, beyond obvious considerations of available products, potential costs, procedures, and so forth, is to ask: Is your IT company a good fit for my company, and if so, how?

  • IT service providers are usually accustomed to servicing certain business sizes or types. Oftentimes many small-city providers are dealing mostly with small and medium businesses while others within larger cities are mainly accustomed to working for large enterprises. You’ll want to match your business with an IT service provider that has a host of solutions tailored just for your business size. In addition, your business type is also a factor in that there’s a big difference between the IT needs of a stock broker whose commodities and sales are all online as compared to a retail store that holds a lot of valuable merchandise on a sales floor with glass front windows as compared to a large, barley marked warehouse that’s piled high with boxes of expensive equipment. The stock broker will need heightened online and network security while the glass-front retail shop may need heightened security cameras placed outside the building while the warehouse may need heightened security inside the warehouse and a strong server for mass inventory data. Ask potential IT service providers if they’ve ever serviced the type of business or a similar type of business as yours and if they answer “no,” you’re going to better off with an IT service provider that’s accustomed to working with your business size and type.

Therefore, following up on the premise that small- and medium-sized businesses oftentimes lack specific criteria to go by when seeking to hire an IT service provider, this list of ten basic questions will certainly have your business moving along the right path towards choosing an IT service provider only once for your business instead of going through several providers before finding the right one. This 10-question list is your small- and medium-sized business guide to honing in on the most qualified IT service provider because of its ideal fit with your business.

Become a Home Based Travel Agent – 3 Perks of Running Your Own Agency From Home

The article below will talk about how to become a home based travel agent and 3 perks that come along with being this type of business owner. The internet changed many things, but one of the biggest things was how people book their travel. Many don’t use travel agents anymore, but that doesn’t mean you can’t still make money in the travel industry.

1. Travel Discounts: When you become a travel agent you gain many perks including discounts on your travel. If you choose to get certified you will receive discounts on hotels, cruises, air travel and more. It isn’t the main reason to become one, but it is nice to get these discounts and the amount of money you save adds up to a great deal over time.

2. Your Own Schedule: Unlike working for a brick and mortar agency, which is also not as necessary in today’s internet world, you can set your own schedule when you work from home. You can decide what kind of agent you want to be, what kind of places you want to research and book, and whether or not you even want to plan trips for people. It is completely up to you how you want to run your travel business.

3. Many Ways to Make Money:It used to be that in order to make a commission as a travel agent you had to make a sale; but the internet has changed all that and now there are many ways to make money as a home based travel agent. You don’t even have to sell any travel in order to make money in the travel industry, you can do so by simply creating a website and talking about travel if you wish. But if you love to plan trips and that is something you want to do, then there are still many ways you can make money doing that too. You can make money through Google AdSense, as an affiliate for travel companies, you can even become a condo broker, the opportunities are endless and are definitely not restricted to just scheduling and selling a vacation.

Above we talked about how to become a home based travel agent and just a few of the perks that come along with being one. Not only do you get travel discounts, get to make your own schedule, but there are so many different ways to make money as an agent these days working from home you no longer have to slave away in the hopes for a small commission. In fact, it is possible to make money with a travel website without ever booking a vacation, you can pick and choose how you want to earn a living as a home based travel agent.