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What are Pre-Tax Medical Premiums?
A pre-tax medical premium is deducted from the employee’s pay before any income taxes or payroll taxes are withheld and then paid to the insurance company. This can deliver savings of up to 40%, depending on one’s tax bracket. Pre-tax premiums are typically employer-sponsored plans and include the following: · Major medical coverage purchased through your employer · Supplemental/voluntary coverage purchased through your employer · Healthcare spending account contributions, such as FSAs · Employer-sponsored reimbursements for medical premiums After-Tax Medical Premiums If one does not want to participate in their employer’s pre-tax plan, or if the employer doesn’t offer a pre-tax plan, one can elect to deduct their medical premiums on an after-tax basis. After-tax premiums include the following: · Major medical coverage purchased on one’s own (for example, purchasing individual health insurance through the Health Insurance Marketplace). · Supplemental/voluntary coverage purchased on one’s own. Tax deductions for after-tax premiums After-tax plans can still offer some savings. One can still list premiums as an itemized deduction on Schedule A when one file’s their income taxes, for all medical expenses and premiums that exceed 7.5% of one’s income. Additionally, most self-employed taxpayers (including owners) can deduct health insurance premiums using Schedule 1 for Line 16 on their tax form 1040. HRAs deliver pre-tax benefits with after-tax flexibility With a health reimbursement arrangement (HRA), one purchases a plan on the individual insurance exchange using after-tax dollars. The employer then reimburses for premiums, and often other out-of-pocket medical expenses, up to an employer-defined amount (this is typically a monthly or annual “allowance”). The reimbursements are made on a pre-tax basis, so one gets the same payroll and income tax benefits as one would with a traditional pre-tax plan. In addition, the employee gets the benefits of an after-tax plan. They choose the exact plan they want and need, typically from a much larger set of carriers and offerings than your employer might offer. Employees can drop the plan at any time and they can take it with them if they leave their employer. (If you leave the employer, you will lose the pre-tax reimbursements.) For more information Contact Jim Pitts at 610-684-6930 or email him at jim.pitts@mybenefitadvisor.com or visit www.affinity.mybenefitadvisor.com
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Minority-owned businesses more confident than others to navigate through pandemic
WILMINGTON, Del., Nov. 05, 2020 (GLOBE NEWSWIRE) -- Sixty-four percent of area businesses view a resurgence of COVID-19 as the greatest foreseen challenge to their business, followed by an uncertain operating environment (46%) and the cost to modify workspaces (43%) for their employees, a WSFS Bank survey of 300 businesses throughout the Greater Philadelphia region and Delaware found. Despite these concerns, more than half of business leaders surveyed (54%) indicated they are well positioned for the future and have already experienced positive growth, largely due to modified business models, new and efficient ways to work, and pivoting toward new ways to plan for an uncertain future. Minority-owned businesses are even more bullish, with 56 percent expecting revenue increases in the next 12 months as a result of pivoting how they operate. Facing Challenges Head-on Businesses throughout the region noted that COVID-19 changed the way they operate, with 68 percent either reducing or modifying operations. However, one-quarter reported either no impact on their operations (17%) or even expanding operations (8%) during the pandemic. Those that experienced growth (54%) due to operational changes credited lower operating costs (49%), more efficient marketing (46%) and paying attention to customers (42%) as the primary drivers of their growth. “Throughout the COVID-19 pandemic, businesses have been incredibly resilient and leaned on their ingenuity and deep knowledge of their customers’ needs to weather the storm,” said Steve Clark, Executive Vice President and Chief Commercial Banking Officer for WSFS Bank. “Whether they lowered operating costs, pivoted to provide customers with products and services in new ways, or worked closely with their lenders to obtain assistance, they dug deep and did what was necessary to keep their businesses not only running, but moving forward.” Another significant challenge faced by business leaders was the pandemic’s direct impact on workers and their families, as 53 percent of businesses cited their employees and/or employees’ families contracting COVID-19 as the greatest challenge to their business, followed by a reduction in the amount of money spent or invested in the business (50%). Nearly one-third (29%) of businesses experienced layoffs during the pandemic, with the retail sector facing significantly more layoffs (47%). The fear of layoffs has eased slightly among business leaders, as only 21 percent anticipate future layoffs. Resilient, Adaptive and Prepared As they anticipate future challenges that may impact their businesses, respondents also feel recent experiences, the ability to pivot and preparedness leave them well equipped to handle a pandemic resurgence. A majority of businesses (88%) changed the way they operated in response to the pandemic, and nearly all of them (89%) are likely to retain their new operating models, while nearly half (46%) believe they will actually see revenues increase in the next 12 months due to these changes, signaling growth in spite of the challenging environment. A key factor to this optimism comes from growth during the pandemic with minority-owned businesses (79%) and the manufacturing, wholesale and distribution sectors (71%) leading the way. Sixty-one percent of mid-sized businesses ($5-$25 million) also reported growth. Ninety-one percent of survey respondents also believe they can weather another storm. Banking on Relationships In the face of COVID-19’s impact on businesses, 79 percent of respondents wanted their bank to be proactive in guiding them through the pandemic, including 81 percent of minority-owned businesses. Nearly three-quarters (73%) of business leaders feel their banks did help, and 85 percent of minority-owned businesses felt the same. Nearly half (46%) of all respondents said their bank helped them get loans during the pandemic, including Paycheck Protection Program (PPP) loans, and four in 10 (41%) reported that their bank offered loan deferrals. Nine in 10 (89%) businesses said they are likely to remain with their current bank based on their relationships and their bank’s performance. “As we move into 2021, it will be increasingly important for banks to stand side-by-side with their business Customers while they continue to navigate changes and challenges to how they operate,” adds Clark. “Nearly one-quarter of respondents (23%) expressed concern over access to capital, and it’s crucial that banks be mindful of businesses’ unique cash flow needs.” Survey Methodology The study was conducted by research company The Melior Group. The sample includes 300 businesses (including non-profits) with revenues between $1 million and $50 million in the five-county Philadelphia market (Philadelphia, Bucks, Chester, Delaware, and Montgomery), two New Jersey counties (Burlington and Camden), and all three Delaware counties (Kent, Sussex, and New Castle). All respondents were financial decision-makers for their business. The online survey was conducted in late September and early October 2020, with a margin of error of +/- 5.6 percent at 95 percent confidence. About WSFS Financial Corporation WSFS Financial Corporation is a multi-billion-dollar financial services company. Its primary subsidiary, WSFS Bank, is the oldest and largest locally managed bank and trust company headquartered in Delaware and the greater Philadelphia region. As of September 30, 2020, WSFS Financial Corporation had $13.8 billion in assets on its balance sheet and $23.1 billion in assets under management and administration. WSFS operates from 115 offices, 90 of which are banking offices, located in Pennsylvania (54), Delaware (43), New Jersey (16), Virginia (1) and Nevada (1) and provides comprehensive financial services including commercial banking, retail banking, cash management and trust and wealth management. Other subsidiaries or divisions include Arrow Land Transfer, Cash Connect®, Cypress Capital Management, LLC, Christiana Trust Company of Delaware, NewLane Finance, Powdermill Financial Solutions, West Capital Management, WSFS Institutional Services®, WSFS Mortgage, and WSFS Wealth Investments. Serving the greater Delaware Valley since 1832, WSFS Bank is one of the ten oldest banks in the United States continuously operating under the same name. For more information, please visit www.wsfsbank.com. |
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