Archive for the ‘Health Insurance’ Category
Tuesday, July 20, 2010 | Written by Erik Rostad
Posted under: Financial Concerns, Health Insurance |
Tags: 1099 forms, freelancers, small business owners, small business taxes, vendors |
1 Comment
The Wall Street Journal recently reported on a new tax provision that was passed by lawmakers in March 2010 that could have serious ramifications for small business owners and entrepreneurs around the country. The provision was passed as a way to confront the more than $300 billion of lost revenue due to tax evasion. Apparently $100 billion of this is from under-reporting income from deducting business expenses.
The new provision was signed into law by Obama on March 23rd as part of the Patient Protection and Affordability Care Act, also known as Obamacare. This provision would require businesses to file a 1099 form each time they purchase goods and services totaling $600+. This would start in 2012 and would raise $17 billion in additional taxes in the next 10 years to go towards the payment of Obamacare.
Right now, if a small business hires the service of an unincorporated freelancer and the bill is over $600, the business must file a 1099 report. If that same small business goes to the store and purchases a $2000 piece of equipment, a 1099 is not required. Under this new provision, a 1099 would be required for the piece of equipment. In fact, a 1099 would be due for every payment over $600.
Additionally, if the small business uses the services of a vendor who won’t supply a Tax ID #, the small business is then to withhold the taxable amount of the payment (28%), send that amount to the IRS, and send the vendor the remaining amount.
What this will likely lead to is small businesses having to keep better track of their expenses to see if they go over $600 per vendor. That could be a good thing. But, this will also lead to a lot of additional reporting work to the IRS. Time is money, so it will cost small businesses in lost time. It will also cost accounting firms more time and they will charge more money to small businesses. And it will cost the IRS more time and money in going through these additional 1099 forms.
It will probably also lead to a lot of services priced at $599.
Tags: 1099 forms, freelancers, small business owners, small business taxes, vendors | Posted under Financial Concerns, Health Insurance | 1 Comment
Thursday, May 27, 2010 | Written by Erik Rostad
Posted under: Government, Health Insurance |
Tags: healthcare lawsuit, nfib, obamacare, obamacare constitutionality |
No Comments
The National Federation of Independent Business (NFIB), the self-proclaimed voice of small business, is joining the 20 states challenging Obamacare’s constitutionality. Find out why in this morning’s Wall Street Journal Op-Ed by Dan Danner, CEO of NFIB.
http://online.wsj.com/article/SB10001424052748704113504575264802756326086.html
Tags: healthcare lawsuit, nfib, obamacare, obamacare constitutionality | Posted under Government, Health Insurance | No Comments
Wednesday, March 31, 2010 | Written by Erik Rostad
Posted under: General Thoughts, Health Insurance |
Tags: entrepreneurs, job opportunities, obama and entrepreneurs, obamacare |
1 Comment
The relative merits of ObamaCare for entrepreneurs & small business owners is a heated topic right now, even on this blog. At this point, some people predict the bill to be a huge success in covering uninsured people and falling within a budget. Others believe and predict that this bill will cost drastically more than what is budgeted and that it will lead to much bigger problems in the near future.
What we do know right now is that the following companies have stated they expect the listed charges below due to a law in ObamaCare that eliminates tax breaks on prescription-drug coverage to retirees:
- AT&T – $1 billion
- John Deere – $150 million
- Caterpillar – $100 million
- 3M – $85 Million
- AK Steel Holding – $31 Million
Based upon the fact that companies are already preparing for tax hikes, this presents an incredible opportunity for Entrepreneurs, but not in the way that the administration is touting. My prediction is that as companies look at the rising cost of providing health insurance to employees, they will begin to look outside the company to fulfill a number of roles. This will be realized in hiring contractors and in outsourcing other jobs.
Does a company need to pay a full team of web developers or can they hire your local team of designers & developers? Does a firm need a department dedicated to marketing, or can they hire your marketing & advertising agency? Does an accounting firm need to pay overtime during tax season, or can they outsource the work to local entrepreneurs or even BPO (business process outsourcing) firms in India?
These are the decisions that companies have been making for many years and will continue to make if costs increase dramatically due to ObamaCare.
Remember that most employers know the 3 to 1 rule. That an employee must generate 3 times as much income as they are paid to pay for office supplies, healthcare, etc. If that ratio increases, it will be harder for companies to justify keeping entire departments of their company when the work can be outsourced to small business owners, entrepreneurs, and BPO’s.
Tags: entrepreneurs, job opportunities, obama and entrepreneurs, obamacare | Posted under General Thoughts, Health Insurance | 1 Comment
Sunday, March 28, 2010 | Written by Jim Beach
Posted under: Health Insurance |
Tags: health insurance for entrepreneurs |
2 Comments
I wrote a month or so ago about an entrepreneur that used the Chamber of Commerce route to get health insurance for his family. Now that the Obama health plan is law, the whole game has changed. Even if you have great Medicare or corporate insurance, you must be prepared to take your insurance into your own hands.
Last week, my 74 year old dad decided to change his doctor. He called the new doctor, and when they found out he was on Medicare, they denied him. The Republicans that claim that the elderly will have insurance issues in the near future are right. Doctors do not want and will not accept Medicare. Soon my mom and dad may be better covered by getting their own insurance. I get my insurance from the big corporation were my beautiful wife works. The company ranked in the top 10 employers in the US by Fortune magazine last year. I would assume that they would be one of the last big companies to drop private insurance. But who knows?
Entrepreneurs need an alternative. I was interviewing a business owner last week for the book Chris and I are writing. His firm uses Paychex for their 401k, paychecks, and insurance. Paychex bundles all their clients and gives insurance, at low group rates, to all their clients. My interviewees firm gets low rates that otherwise they could never afford.
Please note that I am not paid by Paychex!! But they are offering a great service for entrepreneurs. Stop complaining, get insured!
Tags: health insurance for entrepreneurs | Posted under Health Insurance | 2 Comments
Monday, March 22, 2010 | Written by Jacob Dearolph
Posted under: Government, Health Insurance |
Tags: economy, entrepreneur, Government, Health Care, health care insurance, obama |
14 Comments
The bill passes 219-212. Very close. Wow. I’ve got some thoughts on what the bill does below, promises and statements from Obama, and a few things from Pelosi. Also, Jim predicted that this would happen. Let’s see if the other half of Jim’s prediction comes true. (Read his blog of predictions)
“The health-care bill passes but is disrupted by countless court cases. It is eventually found to be unconstitutional.” - Jim Beach’s Prediction from Dec 30, 2009
Bill does the following (my thoughts in italics):
- No more rejections for pre-exisiting conditions (Isn’t there a reason for these restrictions – ie risk actuary tables that drive costs…meaning the cost to insure these folks makes it impossible to effectively manage health cost…just a thought)
- New regs on insurance companies to limit increasing premiums (ok – I hope it is effective)
- Greater access to preventive care (This sounds good)
- Kids can stay on till 26 (This just reflects very BADLY on my generation…we are too lazy to get out of our parents house…not only did they buy us everything, paid for college but now we can mooch off our parents health care….I”m glad I can count myself among this younger generation)
- Everyone has to have insurance (Great let’s see how that’s implemented, managed, and paid for…what is the penalty for not having insurance)
Things Obama Said:
- Obama just promised that small business was going to benefit from this bill. He also said that this bill will allow a small business owners to employ someone verses having to pay for health care.
- “Long after the debate, analysis, etc… fades away what is left standing is a health care system that incorporates both parties”
- Very interesting – health care tax cut for new business owners or those who lose their job.
- Medicare stronger and more solvent
- Reduce deficit by 100 bil in next decade and 1 Trillion the following decade
- “This is what change looks like”
- Bring debate to a close and start implementation of the bill.
- Another stone firmly laid in the foundation of the American Dream. When faced with crisis we did not shrink we overcame it. We did not fear our future we shaped it.
Well, I just jotted down some things Obama said. The questions I have are still there – How is it going to be paid for? How will it be implemented? Will these promises ever be fulfilled or are they just vacuous political statements?
A few things from Pelosi:
- The bill will release tremendous entrepreneurial power in our country (what!?!@?!)
- It will allow people to follow their passions and interests without having to worry about health care
- Under this bill their entrepreneurial spirit will be released
- This bill will save the tax payer 1.3 trillion dollars
- It’s personal for women….under this bill being a woman will not be a preexisting condition (???)
She’s just crazy.
Well small business and entrepreneurs stand strong and continue to remain flexible.
I end with two quotes from a good friend:
- “What good is a more perfect union when that more perfect union is bankrupt and defunct!” (This was after Rep Jim Clyburn said that this bill was a step to a more perfect union)
- “One more stone laid at the grave site of America…” (Obviously a play on Obama’s statement)
Tags: economy, entrepreneur, Government, Health Care, health care insurance, obama | Posted under Government, Health Insurance | 14 Comments
Thursday, February 4, 2010 | Written by Jim Beach
Posted under: Health Insurance |
Tags: health insurance entrepreneurs |
2 Comments
I met my downstairs neighbor yesterday. He and his wife are from South Africa and moved here to be near their 3 children and several grandkids. As an international lawyer, he is still able to work, but at 71, considers himself largely retired. Nice guy, great neighbor.
He told me the story of getting health care when he moved to the States several months back. Upon arriving, he applied for Blue Cross/Blue Shield, but due to his age and a very small pre-existing condition, was denied. Of course.
His comment was classic, “But in America, you must learn to never accept ‘No’ and to keep trying until you get what you want!” So, true. Especially for us entrepreneurs. When denied, you find a different way to skin the cat. My neighbor set about a search for all the organizations that offer health insurance as a benefit of membership. He found several chambers of commerce that did indeed offer it, and shop which plan was better, which membership was cheaper, etc. He created a business in upstate New York that serves as a corporate shell for his ongoing legal work and joined the chamber. And now, lo and behold, he gets insurance for a “great, cheap rate.” I love this story. I love his entrepreneurial attitude of never giving up.
What do you think of that Nancy and Harry?
Tags: health insurance entrepreneurs | Posted under Health Insurance | 2 Comments
Saturday, January 9, 2010 | Written by Erik Rostad
Posted under: Economics, General Thoughts, Health Insurance |
Tags: entrepreneur insurance, Health Insurance, small business owner insurance |
3 Comments
My wife and I had some new friends over last night and I had an interesting conversation with a gentleman looking to start his own business. He has a strong corporate background and is used to having health insurance from his company. One of his biggest fears in proceeding on his own as an entrepreneur was how he would support himself and his wife with health insurance.
Health insurance fears should not be a reason to keep you from pursuing your entrepreneurial ambitions. But that is one of the first questions I receive from many people when they realize I work for myself. I have purchased health insurance for my wife and I from a gentleman who specializes in providing insurance to entrepreneurs and small business owners. The way I found this gentleman was by asking an entrepreneur friend in the Atlanta area what he did for insurance. Believe it or not, when I was single and working for myself, I was actually paying less per month in health insurance than the subsidized plan I used while working in Corporate America!
My friend was recently listening to a radio show that estimated the current freelancer/consultant workforce to be 25% of the USA workforce. As early as 2010, that percentage is expected to come closer to the 50% mark. What that tells me is that there will be increasingly more opportunities to obtain health insurance at a great value as more people start businesses filling this need (hey, as an entrepreneur, you may want to check out this expanding market).
If you are unsure about what to do for health insurance for you and your family as you leave Corporate America and venture off on your own, seek out entrepreneurs in your community (church, ex-coworkers, club, gym, etc) and ask them how they are currently insured. Chances are, they will be able to provide follow-up contact information. We are currently redesigning The Entrepreneur School website and hope to offer this information in our forum so that you have contact information for insurance agents who work with entrepreneurs and small business owners in your city.
If you live in the Atlanta area and need the contact information for a health insurance agent for small to medium sized companies, please email me at erik@theentrepreneurschool.com or comment on this blog post with your return contact information.
Tags: entrepreneur insurance, Health Insurance, small business owner insurance | Posted under Economics, General Thoughts, Health Insurance | 3 Comments
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