Insurance Insights: The Cleary Insurance Blog
The Cleary Insurance blog covers insurance, risk management, and financial planning for New England businesses and individuals. Our team of licensed advisors and specialists publishes regular articles on commercial and personal coverage, employee benefits, life and financial planning, and insurance compliance. Browse recent articles below, or use the category filters to find topics relevant to your business or personal situation.
New Healthcare Assessment for Massachusetts Employers
We want to make you aware of an important law that will impact Massachusetts-based employers beginning January 1, 2018. Under a law signed recently by Governor Baker, employers with six or more employees will begin paying a new health care assessment to support the Commonwealth’s Medicaid program, MassHealth.
Highlights of the new law
- It increases the existing Employer Medical Assistance Contribution (EMAC) from $51 per employee to $76.50 per employee.
- It establishes a new assessment on employers for any employee who enrolls in MassHealth or subsidized insurance coverage offered through the Massachusetts Health Connector. The assessment is $750 per employee, per year.
- Employers will most likely pay the assessment on a quarterly basis–just like they do for unemployment insurance.
- Employers who hire any worker for at least one day during any 13 weeks in a calendar year, and who pay at least $1,500 in wages per quarter, will be required to contribute.
The Massachusetts Department of Unemployment Assistance and the Health Connector are still finalizing regulations to implement the assessment. The regulations are expected to be completed before the end of the year. The assessment is expected to generate $200 million annually; it is scheduled to end on December 31, 2019.
Law also reduces unemployment contribution rates
To help offset the impact of the new assessment on employers, the law also reduces Massachusetts unemployment contribution rates for two years. For more information on the employer contribution schedule, visit the link below:
5 Questions to Ask Clients Who Are Considering a 401(k) Loan
Presented by Douglas W. Greene CFP® CLU®
Advisors may suggest to their clients that they never take a loan from their 401(k) plan, but things happen, and happen more often than you might think. According to Morningstar, at the end of 2012, 21% of 401(k) plan participates who were eligible had loans outstanding against their 401(k). 50% of people who borrow against their 401(k) will do so more than once.
Here are five key questions to ask clients:
- Does your intended use of funds promise a higher rate of return than leaving the money be?
– Steering borrowed funds to an investment with an uncertain payoff is much less compelling than paying off high interest debt. - Is your job secure?
– If you leave your employer with a loan outstanding, you will usually be forced to pay back the loan soon, usually within 90 days. - Can you realistically pay this back?
– Because there is no credit check, the client is the one responsible to deciding if the loan is financially viable. Make sure household budget is considered as interest will increase the payments. - Are you prepared to lose the benefit of your tax deductions?
– A 401k provides an employee federal and state income tax deductions on contributions. If a loan is taken, it must be paid with after-tax dollars thus offsetting the benefit of the deductions. - Do you feel like you can afford to delay your retirement saving?
– Their budget may not be able to support the loan repayment and current 401(k) savings. Also, the money withdrawn does not have the opportunity to grow with the market.