Small Business - Perspective Financial

New Employee Healthcare Option for Small Business Owners

Health reimbursement arrangements (HRAs) are a type of account-based health plan that employers can use to reimburse employees for their medical care expenses. Just like there are many types of qualified retirement plans, there are many types of HRAs. Effective January 1, the federal government has enacted new HRA rules that will be especially beneficial for small business owners in offering a new employee healthcare option.

Individual Coverage HRAs can now be used to reimburse premiums for individual health insurance chosen by an employee, in addition to other medical care expenses. This promotes employee and employer flexibility, while also maintaining the same tax-favored status for employer contributions toward a traditional group health plan.

The new rules also increase flexibility in employer-sponsored insurance by creating another, limited type of HRA that can be offered in addition to a traditional group health plan. These Excepted Benefit HRAs permit employers to finance additional medical care (e.g. to help cover copays, deductibles or other expenses not covered by the primary plan) even if the employee declines enrollment in the group plan.

Want more information on this new employee healthcare option? This HRA document from the U.S. Department for Human & Health Services may be helpful. You can also your advisor with any questions.

By Perspective Financial Services|2020-03-18T11:01:58-07:00March 25th, 2020|Health Care, Insurance, Small Business|

Strong Holiday Spending Expected

Photo courtesy of freedigitalphotos.net and photostock.

Holiday retail sales in November and December are expected to increase between 4.3 and 4.8 percent over last year. This is according to a recent forecast from the National Retail Federation (NRF). That strong holiday spending would equate to total sales of about $717 billion to $721 billion this year.

“Our forecast reflects the overall strength of the industry,” said Matthew Shay, NRF president and CEO.

“Thanks to a healthy economy and strong consumer confidence, we believe that this holiday season will continue to reflect the growth we’ve seen over the past year. While there is concern about the impacts of an escalating trade war, we are optimistic that the pace of economic activity will continue to increase through the end of the year.”

Holiday sales in 2017 totaled nearly $688 billion. That is a 5.3 percent increase over the year before and the largest increase since the 5.2 percent gain in 2010.

NRF’s forecast for strong holiday spending is based on an economic model using several indicators. They include consumer credit, disposable personal income and previous monthly retail sales. The forecast includes online and other non-store sales, as well.

Retail is actually growing faster than the rest of the economy at large, according to research from IHL Group. While the lines between digital and physical shopping experiences are blurring, stores are not going away. IHL data shows that for every single retailer closing stores, two others are opening stores. The group expects stores to be involved in 81 percent of all retail sales in 2021.

By Perspective Financial Services|2019-08-14T13:59:47-07:00November 4th, 2018|Current Affairs, Small Business|

Protecting Your Business From Liability

Protecting your business from liability is critical. If you or your business provides professional services or advice, professional liability insurance can help protect your assets if you are ever sued. It covers financial losses suffered by third parties as a result of errors and omissions in your services (it is also sometimes called E&O insurance).

Attorneys and physicians consider this type of protection a necessity; in fact, legal and medical malpractice insurance is required by law in many states. Other professionals who should explore and consider professional liability insurance include accountants, software developers, real estate agents and consultants.

According to the Insurance Information Institute, there are two types of professional liability policies: claims-made and occurrence. Most policies are claims-made, meaning that the policy must be in effect both when the event took place and when a lawsuit is filed for a claim to be paid. An occurrence policy is less common, but will cover any claim for an event that took place during the period of coverage, even if the suit is filed after the policy has lapsed (such as after you’ve retired or changed careers).

Policies will generally have a deductible ranging from $1,000 to $25,000. The amount of professional liability insurance you will need and how much it will cost depends upon the size of your business and the level of risk it poses. Coverage does not extend to losses caused by intentional or dishonest acts. Professional liability insurance also does not cover bodily injury or property damage claims (these are typically covered by commercial general liability policies).

Consult with your financial planner or inquire with your profession’s trade association about protecting your business from liability and to determine if you might need professional liability coverage.

By Perspective Financial Services|2019-08-14T13:59:52-07:00September 6th, 2017|Insurance, Small Business|

Operating a Home Business: Can It Work for You?

Estimates by the U.S. Bureau of Labor Statistics in 2010 show that more than 18 million businesses are run primarily out of a home. Given recent advances in mobile and wireless technology, as well as the cost-cutting realities of a low-growth economy, that number may be even higher. If you’re considering running a home business, there are a number of things you’ll want to consider.

Operating a Home Business

First, make sure your home business meets zoning regulations and that any required licenses or permits are obtained. Many municipalities and condominiums restrict home business activities. If customers will come to your home, you may need to consider parking, disability access and display of advertising. You may also need to amend your homeowner’s insurance policy to cover commercial activities.

The IRS may allow you to deduct certain expenses — such as phone, internet hookup, a portion of your rent or mortgage — based on the percentage of space in your home that the office occupies. To qualify, the home office must be used exclusively for business; a guest room or other shared space will not qualify. The key to claiming any of these deductions is to prove that they are necessary for and confined to business use.

Finally, you should also consider how the arrangement will impact your family. Will there be tension if you’re home all day? Will your work presence cramp your family’s daily activities? How will they interact with clients or employees? Make sure to give this issue serious thought and discuss it with your family.

By Perspective Financial Services|2019-08-14T14:00:16-07:00November 7th, 2012|Financial Planning, Real Estate, Small Business, Taxes|