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2014 Tax Changes Checklist

Now that we have turned over a new year, you can be sure that there will be changes to the current tax laws. From health savings accounts to retirement contributions, our tax partner, Dave Toney from AccounTax, offers a checklist of tax changes to help you plan the year ahead.

Filing Season Delayed by 10 Days

Taxpayers should note that the 2014 tax season opens on Jan. 31 instead of Jan. 21, 2014, due to the government shutdown that took place in October 2013. The April 15 tax deadline is set by statute and will remain in place, although taxpayers can request an automatic six-month extension to file their tax return.

Individuals

– For 2014, more than 40 tax provisions are affected by inflation adjustments.

– For 2014, the tax rate structure, ranging from 10 to 39.6 percent, remains the same as in 2013, but tax-bracket thresholds increase for each filing status.

–  Standard deductions and the personal exemption have also been adjusted upward to reflect inflation.

“Kiddie Tax” 

This tax is applied to your child’s unearned income of more than $2,000 ( Unearned income meaning investments, such as interest, dividends and capital gains, not income from wages or self-employment). For taxable years beginning in 2014, the amount that can be used to reduce the net unearned income reported on the child’s return that is subject to the “kiddie tax,” is $1,000 (same as 2013).

Health Savings Accounts (HSAs) 

In conjunction with a High Deductible Health Plan (HDHP), contributions to a Health Savings Account (HSA) are used to pay current or future medical expenses of the account owner, his or her spouse, and any qualified dependent. For 2014, a qualifying HDHP must have a deductible of at least $1,250 for self-only coverage or $2,500 for family coverage (unchanged from 2013) and must limit annual out-of-pocket expenses of the beneficiary to $6,350 for self-only coverage (up $100 from 2013) and $12,700 for family coverage (up $200 from 2013).

Self-only coverage

For taxable years beginning in 2014, the term “high deductible health plan” means, for self-only coverage, a health plan that has an annual deductible that is not less than $2,200 (up $50 from 2013) and not more than $3,250 (up $50 from 2013), and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $4,350 (up $50 from 2013).

Family coverage

For taxable years beginning in 2014, the term “high deductible health plan” means, for family coverage, a health plan that has an annual deductible that is not less than $4,350 (up $50 from 2013) and not more than $6,550 (up $100 from 2013), and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $8,000 (up $150 from 2013).

AGI Limit for Deductible Medical Expenses

In 2014, the deduction threshold for deductible medical expenses remains at 10 percent (same as 2013, but up from 7.5 percent in 2012) of adjusted gross income (AGI); however, if either you or your spouse were age 65 or older as of December 31, 2013, the new 10 percent of AGI threshold will not take effect until 2017.

If you have questions about the tax changes for 2014, please contact Dave at dat.accountax@fuse.net or 513-528-5566. You can view the 2014 Tax checklist in its entirety here.

Americans are Paying More for Employer-based Insurance under Obamacare

According to Bankrate.com, 47% of Americans with employer-based health insurance say more money is being taken out of their paychecks each month for health insurance than a year ago, and 44% have higher out-of-pocket expenses. These statistics affect upper middle income families the most, and they feel hardest hit by Obamacare.

The good news is that most families who feared losing coverage resulting from the Affordable Care Act have not. “Since so much of the Obamacare conversation has focused on uninsured Americans and the government-run exchanges, it’s easy to forget most Americans – about 150 million – get their health insurance from an employer,” said Bankrate.com insurance analyst Doug Whiteman. “People covered under these plans should watch for changes and discuss with their employers how Obamacare may affect their coverage and costs.  In some cases, getting insurance through the health exchanges could be more cost-effective, so it is important to research all possibilities.”

Additional findings:

  • 52% of females with employer-based coverage report higher out-of-pocket expenses, compared to only 35% of males.
  • 48% of Americans want to repeal Obamacare, while only 38% want to keep it.
  • Americans who feel more negative about the law outnumber those feeling more positive by a two-to-one margin (31% to 15%).

The survey results come from Bankrate.com’s Health Insurance Pulse, a monthly survey that tracks how Americans are feeling about health care and their finances. You can read the survey in its entirety here.

If you have additional questions, please feel free to contact us at 513-677-6262; (800) 858-1772 or service@claimlinx.com – we would be happy to help.

US Health Spending Expected to Grow 5.8% Annually

Estimates project aggregate health care spending in the U.S. will grow at an average rate of 5.8% for 2012-2022, according to data released from the Office of the Actuary at the Centers for Medicare and Medicaid.

The increase is one percentage point faster than expected in the gross domestic product so that the health care share of the GDP in 2022 is projected to reach 19.9%, up from 17.9% in 2011.

These projections reflect a combination of factors affecting health care spending, including forecasted changes in the nation’s economy and provisions of the Affordable Care Act.

For 2013 health care spending was projected to remain under 4% because of the sluggish economic recovery, slowed growth in Medicare and Medicaid spending, and continued cost-sharing requirements for the privately insured.

But starting in 2014, growth in national health spending is expected to accelerate to 6.1 percent. The sharp rise in the coming  year is mainly due to the expanded insurance coverage as a result of the ACA, though either Medicaid or other marketplaces.

The use of medical services and goods, especially prescription drugs and physician services, among the newly insured is expected to contribute significantly to spending increases in Medicaid and private health insurance. In addition, out-of-pocket spending is expected to decline 1.5% in 2014 because of new overages and lower cost sharing for those with better coverage.

Further analysis may indicate these increases may not be cause for alarm, however. The Office of the Actuary also studied the relationship between economic growth and health spending over the past 50 years. It suggests that health spending growth is likely to accelerate once economic conditions improve markedly.

“Although projected growth is faster than in the recent past, it is still slower than the growth experienced over the long term,” Gigi Cuckler, lead author of the study, said.

To learn more about the reasons for the spending increase, read the press release provided by Health Affairs.

 

2014 Tax Provisions of the Affordable Care Act

With the enactment of the Affordable Care Act and Health Care and Education Tax Credits Reconciliation Act of 2010, comes new provisions and changes to the US tax code, creating tax implications for individuals and businesses.

Healthcare Exchanges (Marketplaces) are now open – some are run by the state you live in, while others are run by the federal government.  Please visit the ClaimLinx Exchange for more information.

2014 Health Care Reform Law & Tax Provisions:

  • Individual health care minimum essential coverage mandate/penalties/subsidies.
  • Individuals may be eligible for the new advance Premium Tax Credit that will lower your monthly premium.
  • In 2014, the basic penalty for individuals not adhering to the mandate is $95 or 1% of your yearly income (whichever
  •   is higher), with substantial increases in subsequent years.
  • Exchanges are available to individuals and small businesses.
  • Small Employer Health Care Tax Credit
  • No annual limits on coverage in grandfathered individual and group plans.
  • No preexisting condition exclusions for individuals.
  • Employee awards for wellness programs permitted
  • Annual fee on health insurance providers (for net premiums written after 2012).
  • Increases in required estimated tax payments for large corporations.
  • Flexible Spending Arrangements (FSA) contributions are limited to $2,500 per year starting in 2013 and indexed for inflation after     that.

For more information please visit the Health Care Reform section on our website.  For a free brochure, please email service@claimlinx.com.

If you have additional questions, please feel free to contact us at 513-677-6262; (800) 858-1772 or service@claimlinx.com  – we would be happy to help.

Making the Most of Customer Complaints

No company is perfect. It’s simply a fact, not an excuse.

That is why it is important for businesses to realize that the way they handle customer complaints is just as important as trying to provide great service in the first place.

Customers and clients are constantly judging companies for service failures. First, they judge the company on how it handles the issues and then on its willingness to make sure similar problems don’t happen in the future.

Most companies limit service recovery to the staff that directly deals with the customer. Often customer service sorts out the immediate problem, offers an apology or some compensation and then assumes all is well.

But in the end this approach is damaging because it does nothing to address the underlying problem, ultimately guaranteeing similar issues will arise.

What businesses should be doing is looking at service recovery as a mission that involves three parties: customers who want their complaints resolved; managers in charge of addressing the concerns; and the frontline employees who deal with the customers. All three must be integrated into addressing and fixing service problems.

Here are some quick strategies for real resolutions when it comes to improving service recovery:

  • Create and apply a “service logic” – This should be a mission statement or summary of how and why your business provides its services. It should integrate the goals of the service, customers and employees. The result should serve as a guide both for delivering service and for help with service recovery.
  • Draw attention to success – You can use in-house publications, intranets or training programs to share stories that emphasize your company’s values and culture. Just don’t forget to highlight the heroes of service-recovery stories.
  • Collect and share data – Companies must gather more feedback about poor service, record it and make it accessible. This will help equip managers and other employees with strong information to be effective at resolving disputes.
  • Measure employee performance – Positive reinforcement and incentives should be offered for solving problems and pleasing customers. Likewise there should be disincentives or demerits for poor handling of customer complaints.

To learn more about how to improve service recovery, read the article by Stefan Michel, David Bowen and Robert Johnston this information was taken from.