Monthly Archive: September 2013

Costs to Consider in Retirement

Calculate CostsHave you considered how much some basic needs will cost you in retirement, such as health care?  Did you know that a 65-year-old couple that retired in 2012 need about $240,000 to cover medical expenses throughout retirement?

The rising cost of health care in the United States has become one of the primary risks to a financially secure retirement.  Health care costs are expected to continue increasing faster than inflation.

Costs to consider include:

  • Long-term care services:  How will you pay for any needed long-term care services?  Do you have long-term care insurance?
  • Health Care Costs: Do you know what your out-of-pocket health-care costs might be after you retire?  Are you aware that Medicare, while it covers man health-care costs, has significant limitations?  Are you familiar with the various types of insurance that can help pay health and long-term care costs not covered by Medicare?
  • Life Expectancy: In 2011, men reaching age 65 had an average additional life expectancy of 17.3 years, while woman reaching age 65 could expect to live an additional 20.0 years on average.
  • About one-third of individuals who turned 65 in 2010 will need at least three months of nursing home care, 24% will need more than a year, and 9% more than five years.
  • The average daily rate in 2012 for a private room in a nursing home was $248.
  • The average length of a nursing home stay is 835 days.
  • At an average daily rate of $248, an average nursing home stay of 835 days currently costs over $207,000.

Concerned about potential costs in your retirement?  Consider contacting Cook & Cook Associates for a complimentary Retirement Planning consultation.

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10 Things Every Business Should Know About Healthcare Reform

Questions about healthcared1     Consult a Knowledgeable Insurance Professional

A licensed health insurance broker, serving as your consultant, can be valuable to you in understanding the facts of health reform.

2    Public and Private Health “Exchanges” Come Online

Open enrollment is scheduled to begin in October of 2013 for Health Insurance Exchanges, with coverage effective January 2014.  Private health insurance exchanges are also expanding to offer businesses and employees more choices for coverage at an affordable rate.

3    Health Plans Will Be Classified in “Metal” Categories

Health insurance plans will receive a metal rating- Platinum, Gold, Silver or Bronze- based on “actuarial value” calculations.  For example, Platinum plans will provide coverage for 90 percent of costs while policyholders pay 10 percent.  Bronze plans would offer 60 percent coverage while policyholders would pay the remaining 40 percent of medical costs out-of-pocket.

4    Tax Credits for Small Employers

Employers with fewer than 25 employees and average annual wages of less than $50,000 may claim a tax credit for the cost of providing insurance beginning with 2011 tax returns.  Beginning in 2014 this tax credit is only available to eligible small employers who purchase coverage through the Exchange.

5    W-2 Reporting

Businesses that issued 250 or more W-2’s in 2011 must begin to report on 2012 W-2’s (issued Jan. 2013) the aggregate value of health benefits provided to each employee including medical, dental, and vision coverage.

6    “Essential Health Benefits” Defined

Beginning in 2014, health plans must provide coverage for a minimum set of products and services in the following 10 categories: outpatient services, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse disorder services, prescription drugs, rehabilitative services and devices, laboratory services, preventive and chronic disease services and pediatric services including oral and vision care.

7    Requirement to Inform Employees

Beginning in 2013, employers must provide each employee with written information on the employer health plan, health exchanges, available subsidies for insurance and guidelines on how to purchase insurance.  Further guidance is scheduled for release in late summer, early Fall of 2013, postponed from the original March 2013 deadline.

8    Automatic Enrollment

Employers with more than 200 employees must automatically enroll employees in employer-sponsored plans; however, the IRS has said that rules for this requirement will not be issued until 2014.

9    Limits on Flexible Spending Accounts (FSAs)

Beginning January 1, 2013, FSAs, which allow employees to save tax-free dollars that can be used to pay medical expenses not covered by insurance plans, will have a plan year limit of $2,500 in 2013 (indexed for cost of living adjustments after 2013).

10  Employer Play or Pay

Beginning in 2015, employers with 50 or more full-time equivalent employees will pay a penalty fee if they do not offer health coverage or if they offer coverage which is not affordable or doesn’t have minimum value (60%) and at least one full-time employee receives a premium subsidy.

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