In 2005, the state of Utah recognized the need for reforms in the health care industry, and proceeded to make massive reforms in the system. In 2008 the critical legislation HB 133 was passed forming what is now known as the Utah Health Exchange.
So what is the Exchange? It’s a web-based marketplace where consumers can choose from among many different health care options based on what they need. The pilot program was launched in January 2010, and by January 2011 the system was already in place and ready to accept the first small employer enrollees. It is reported that as of March 7, 2011, about 83 employer groups and 2,534 individuals have successfully enrolled in the Utah Health Exchange.
Basically, the Health Exchange is a contribution program. Employer groups enroll in the Exchange using the broker or advisor they choose to assist them to navigate through the process and assist in educating their employees of their options. You can enroll via an internet-based platform that’s intended to make choosing and enrolling for health care plans easy.
How Can My Business Join? To be an eligible small employer, you must have between 2 to 50 eligible employees; at least 75% of them must reside in Utah; and you must fill out an online application, including submission of eligible documents. As soon as an offer is in place, at least 75% of eligible employees must participate. When your application is in, you can solicit the help of a broker or tax advisor to guide you with the implementation process.
What about a Section 125 Plan? Availing of the Utah Health Exchange Program also requires payroll deduction using pre-tax dollars and this can only be done when the program is run under a Section 125 Plan. Under this arrangement, health care contributions of employees can be completely tax-free.
The tax-advantage status is the biggest benefit that a Section 125 or Cafeteria Plan offers. Because premiums are deducted pre-tax, the participants’ taxable income are significantly lowered. As a result, the employee has a lower taxable income, and therefore lower FICA and Medicare taxes payable. The employer gets a benefit, too: a decrease in the employee’s taxable income can lead to a reduced employer share of FICA and Medicare taxes and even FUTA and state taxes.
The Default Plan Explained. The employer and advisor must choose a default health plan for his employees, and enroll them in the default plan, unless:
1. The employee chooses their own plan option online with a different plan through the Exchange. 2. The employee chooses to waive his right of availing of the plan and secures health coverage outside the company. 3. The employee specifically declines coverage in the health benefit plan.
Whether you have a business in the state of Utah or elsewhere, it’s time to give your employees something they can really use, and give your company substantial tax savings in the process! Best of all, this expertise and support for your Section 125 Plan is available to you for just $99 a year! Drop by at at http://taxfreepremiums.com to find out just how much tax savings you can gain.