Health care reform is back in the headlines as a recent court struck it down as unconstitutional and Congress continues to debate its future. Regardless of the outcome, medical insurance for small business is certainly going to be impacted, one way or another, in the coming months and years. Below are six important questions about health reform as it relates to small employers.Question #1:What is required of small employers with less than 10 who do not offer health insurance?A: There are no specific requirements of employers with less than 10 employees – they are not required to offer coverage. Employers with greater than 50 employees are subject to penalties if they do not offer coverage, $2,000 per full-time employee over 30 employees.Question #2:What about illegal immigrants? The government wouldn’t be able to regulate their coverage so they would still be uninsured, right? Would hospitals still have to treat them?A: Correct. Health Care Reform does not apply to illegal immigrants. Yes, hospitals would still be required to treat and the cost of uninsured would be passed to those that are insured through higher charges by hospitals. This is exactly what is happening today.Question #3:Is Health Care Reform counting employees as Full Time Employee status, or by total head count? Many smaller employers are aming the system to classify staff as part-time employees and paying overtime versus providing health benefits.A: The calculation to determine full time “equivalent” employees will be based on total hours worked by “all employees” divided by 30 hours. Part time employees are included in the calculation.Question #4:What is the benefit of a health plan being grandfathered in versus those that are not?A: Grandfathered plan do not have to provide 100% preventive coverage, treat emergency care the same in and out of network, comply with new internal and external appeal requirements and apply broader definition of “primary care physicians”Question #5:The Cadillac Tax proposal seems to ignore traditional practice of charging higher premiums on older employees. What may look like a Cadillac plan for a 30 year old is likely a very ordinary plan for a 56 year employee.A: Correct. Health Reform includes a requirement that health insurance premiums can not vary by more than a 3:1 ratio for age. Still many health plan premium for larger groups is based on claim experience and older workers have higher utilization that will be reflected in their premiums. It is expected that these inequities will be worked out before the tax goes into effect in 2018.Question #6:With insurance companies, like Blue Shield, asking for a 59% increase, how do the employees see a benefit before the main provisions kick in by 2014?A: There is very little in the Health Reform law that addresses costs. It is expected that health care costs will continue to increase at 12% to 15% annual health care inflation. Health Care Reform requires insurers to submit premium increases to state department of insurance for review and must meet new health care ratios, i.e. 80 % to 85% of premium must be spent on health care.As more and more details of health care reform are clarified, the administration and details relating to medical insurance for small business is likely to become less cloudy and more defined. Continue to watch the news as the story unfolds.
Can you explain to a lender or a broker your commercial loan purpose? This is the first thing a lender wants to know when you request a loan and you need to be able to communicate it to them.So, why do you need the money?Acquisition or PurchaseIs the conveyance of title to you (or your entity) of an existing building or raw land.Usually for a purchase, a lender will loan 80% – 90% of the current appraised value of the property. This percentage will vary depending on property type and income from the property.RefinanceA current mortgage note is being paid off and a new mortgage note is being created. A refinance is usually done to get better terms or pull out cash from the value of a property.Usually for a refinance, a lender will loan 80% – 90% of the current appraised value of the property. This percentage will vary depending on property type and income from the property. Of that percentage, the lender will pay off the current mortgage note and the remaining amount of the loan to the borrower.ConstructionThis is for the building of, renovation of, or rehabilitation of real estate. Generally, these loans are based on the value of the property “as completed”. Be sure to understand if your lender is lending on Loan to Cost or on Loan to Value as Completed.