Social Security – Where’s the AARP?

Do you know when you retire you may be paying taxes on your Social Security income? And yes, you already paid taxes on that income. It’s double taxation. (Our friends in Boston that had a bit of a tea party would love this one.)

Not everyone pays though. Only high income earners. – When you retire will you be a high income earner? – Don’t think so? I suggest you take another look. The government says “This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits.”

And, they try to soften the blow by saying “No one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules.”

Who pays? You do, if you

  • file a federal tax return as an “individual” and your combined income* is
    • between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
    • more than $34,000, up to 85 percent of your benefits may be taxable.
  • file a joint return, and you and your spouse have a combined income* that is
    • between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits
    • more than $44,000, up to 85 percent of your benefits may be taxable.
  • are married and file a separate tax return, you probably will pay taxes on your benefits.

Note: Your adjusted gross income + nontaxable interest + ½ of your Social Security benefits = your “combined income”

And the income levels mentioned above are not adjusted for inflation.

Clients and followers of Employee Benefit Advisors know that despite being well versed in investing and retirement planning we do not dabble in retirement benefits. Our practice is strictly Health & Welfare. We decided to blog bout this issue because every time this topic comes up people are stunned.

Do you want to change this law? Write the AARP. How did they let this get through and why are they not addressing this issue?


Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services. We can customize a wellness plan for your budget and culture.

Men are the problem!

Men don’t go to the doctor unless their arm or leg is falling off or they are dying. Consequently they are a major reason for the large preventable claims your company is incurring. So men, get a reality check, and become a smart patient.

Human Resource Directors, read the following then think about this recommendation. “Employees that have their annual wellness exam should pay less for their employer provided health insurance.” (This recommendation is good for women as well, you don’t want to discriminate. And you can implement this staying HIPAA compliant.)

Guys, you may feel fine, but the numbers don’t lie: More men than women are likely to be diagnosed with diabetes and kidney disease. And according to the Centers for Disease Control and Prevention (CDC) 12.1% of US men have circulatory diseases like coronary heart disease, heart attack and stroke. Your body may be suffering from silent conditions that have little or no symptoms, such as hypertension or colon cancer. About 3.5 million people are diagnosed with skin cancer every year, and men are more likely than women to die from melanoma, the deadliest form of skin cancer.

You should talk to your doctor about your risk of prostate cancer – especially if you’re over 50, African American, or if prostate cancer runs in your family. If you’re a baby boomer, you should get tested for hepatitis C (HCV). More than 75% of adults infected with HCV, often a symptomless disease, were born between 1945-1965. Left untreated, HCV can cause life-threatening diseases such as liver damage, liver cancer and cirrhosis.

So no more excuses. The old “ignore-it-and-it-will-go-away” approach doesn’t work. It’s time to get informed and become a smart patient. Make that doctor’s appointment now.

Statistical information came from sharecare,, a great resource for men and women’s health.


Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services. We can customize a wellness plan for your budget and culture.

Health Care Reform – Where do we stand?

By now everyone knows the initial attempt to replace Obamacare with a more workable solution has failed. I’m sure another attempt will resurface later. Let’s focus on what we know and how President Trump’s executive order, signed in January, impacted Obamacare.

President Trump’s executive order is still in effect. – The primary focus of the executive order was for Federal agencies to minimize the economic burden of the Affordable Care Act (ACA), pending repeal of the law. However, until further guidance or legislation, all ACA requirements remain in effect, including penalties for noncompliance.

The executive order specifically calls upon agencies to exercise authority and discretion to:

  • exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications;
  • provide greater flexibility to States and cooperate with them in implementing healthcare programs; and
  • encourage the development of a free and open market in interstate commerce for the offering of healthcare services and health insurance, with the goal of achieving and preserving maximum options for patients and consumers.

Although the penalties for noncompliance remain in effect it does give the appearance that there is an out. However, I don’t recommend you be the one to test it.

BMI – Good News for those trending on the Porky Side!

BMI, body mass index, measures the weight to height ratio. Good news for those trending on the high side, according to the report in the Journal of the American Medical Association (JAMA), the optimum ratio is on the upper side of the index.

Currently, doctors define the normal range for BMI is between 18.5 and 24.9. A BMI of 25-29.9 is considered overweight, while 30 or higher is obese. In the 1970s, the optimal BMI for the lowest risk of death was 23.7. By 1991-94, the optimal BMI had risen to 24.6, in 2003-2013, it reached 27.

Although the findings suggest the need to reevaluate the categories presently used to define overweight, which are based on data pre 1990s data, don’t start packing on those pounds. Health experts still maintain the risks of being overweight include diabetes, high blood pressure, high cholesterol, and cardiovascular disease – among other things.

Want to know your BMI? – BMI is calculated by weight in kilograms divided by height in meters squared.


Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services. We can customize a wellness plan for your budget and culture.

Predictive Modeling – GRx

Many health insurance companies are looking at prescription usage to underwrite and rate group health insurance. It’s called predictive modeling.

GRx uses complete and current prescription histories. Details include drug name, dosage, fill date, pharmacy and physician information. This Healthcare Intelligence allows carriers to make risk assessment decisions with confidence and more accurately develop premiums. New group rates are quickly and more accurately developed. GRx turns group census data into a risk score. Health plans use the GRx risk score to more accurately predict the group’s future claim costs.

It’s good for the health insurance carrier and the group. Both get a more accurate quote potentially avoiding large rate fluctuations.


Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services. We can customize a wellness plan for your budget and culture.

IRS Guidelines – Indexed for 2017

Social Security Tax is 6.2% on income up to $127,200 up from $ 118,500.
Medicare Tax unlimited 1.45% to Unlimited

High Deductible Health Plans
Minimum Annual Deductible (Individual/Family) $1,300 / $2,600
Maximum Out-of-Pocket Limit (Individual/Family) $6,550 / $13,100

Health Savings Accounts
Individual / Family $3,400 / $6,750
Catch-up Contribution $1,000

Flexible Spending Accounts
Health Care Flexible Spending Account Maximums $2,600
Dependent Care Spending Account Maximum $5,000

Mileage & Transportation
Standard Mileage Rate
53.5 cents per mile for business miles driven
17 cents per mile for medical or moving purposes
14 cents per mile driven in service of charitable organizations
Parking (monthly) $255
Mass Transit Passes (monthly) $255

Compensation Limit $270,000
Highly Compensated Employee Salary Amount $120,000
Annual Compensation for Key Employee $175,000
Defined Benefit Plan Limit $215,000
Defined Contribution Plan Limit $54,000

Retirement Plans
401(k) $18,000
401(k) Catch-up $6,000
403(b) $18,000
457(b)(2) and 124(c)(1) $18,000
457(b) Catch-up $6,000
IRA Limit $5,500/$6,500 for age 50+
Simple IRA Limit $12,500/$3,00 Catch-Up


Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.

Health Insurance As It Should Be (Part 2 of 2): Preventative, Wellness & Biometrics, Genetics & DNA

Under the ACA preventative care was free. At least there was no charge to the insured at the time they received the exam, the cost was built into the premiums. The argument was that an advanced diagnosis would save long term medical costs because illnesses would be caught at an early stage.

If we use that same argument to create “health Insurance as it should be” there are three key strategies that would prove to be very effective.  Here they are and here’s how to use them. (1) Preventative – Individuals have a responsibility to be examined at least periodically (every two years, yearly as we get older – I’ll let the AMA set the standard) and get their immunizations. Those that do receive a lower insurance premium. (2) Wellness / Biometrics – Smokers should be charged more (no need to argue why, everyone should be aware of the added health risks and costs). Lower premiums or premium rebates for those actively managing and meeting standards for blood pressure, BMI, cholesterol and blood sugar level. All are key indicators of health. It makes sense to provide a premium discount to the individual going to the gym or utilizing some other method to improve their health. Those that don’t should pay more. After all, they are costing everyone else more. (3) Genetics & DNA – Technology is a great tool. Let’s use it to help predetermine the medical conditions which we’re predisposed. Not to punish people with higher costs, but to be proactive. A lifestyle change at an early age could help prevent certain illnesses. Information can be kept confidential with case managers and not shared or used with underwriting. – i.e. If you knew you had a family history of cancer, breast or colon, you could be proactive and monitor the signs. Same principle for other genetic diseases.

Let’s use all the available resources to lower health care costs and create a proactive system, health insurance as it should be.

What ideas do you have?


Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services. We can customize a wellness plan for your budget and culture.

Health Insurance As It Should Be (Part 1 of 2): Taxes and Regulations

Much speculations evolves around what changes the Trump administration will bring to health care. Although I don’t know why. The basics have been laid out by the Republicans for months. There is some fine tuning that needs to be done, but the core is in place. In addition to the principles that have been laid out, here are a few well thought out suggestions.  (For a closer look at what’s been proposed go to my July 13th and 27th blogs, Repealing Obamacare – Individual Tax Credit & The Employer Tax Exclusion.)

What part of the current healthcare reform plan would I keep? Once Obamacare is repealed, it must be repealed, my primary complaint is the ACA was implemented as a regulatory law not a health advocacy tool, I’d reintroduce three things. (1) No one should be denied coverage due to preexisting conditions. However, no one should be allowed to burden the system who carries no insurance, goes to the doctor, learns they need medical care and now applies for insurance. They should be required to apply for insurance, bear a heavy portion of the medical expenses for a year or two (contracted rate), and have the carrier assign a case manager. (2) Keep adult children on the plan until age 26, unless they are employed full-time. Then it’s time to put their big boy & girl pants on and be a responsible adult. (3) The Summary of Benefits & Coverage and Glossary of Health Coverage & Medical Terms make it easier to understand coverages. However changes need to be made.

Whatever happens I hope we’ll see both the introduction of individual tax credits and the continuation of the employer tax exclusion, rightfully so. Both are integral to health care. Why individuals have not been able to deduct health insurance premiums is a mystery. The need to continue the employer tax exclusion is important because the vast majority of Americans receive coverage through their employer. Suddenly thrusting 170 million people into the individual market would be chaotic. Also, the employer resources can be provide health advocacy for the employees (independently contracted, through HR or the broker).

Here are some simple solutions that will make health insurance easier and better.

  • Paying for Preexisting Conditions – Every transaction, buying aspirin, medical procedures, hospital stays – anything medical related – should be charged a ‘PreX’ fee of 1 penny. The money would go towards funding preexisting conditions, nothing else. If it raises more than is needed, then cut it back to either ½ penny or only on certain purchases or procedures. (Need to have the bean counters look at this recommendation.)
  • All medical expenses (premium included) should be pretax. Do I really have to explain why this is good/fair? If health care is as important as everyone says, and it is, let’s make it as inexpensive and accessible as possible to all. Eliminate all the complex tax regulations around health insurance, especially the need to have 7.5% of income before receiving the current deduction. (Note: It’s a deduction not a tax credit.)
  • Everyone should be eligible for HSA accounts and eliminate FSA accounts. Why have the use-it-or-lose-it rule? Makes no sense, except the federal government is overly concerned about the tax revenue. Although medical expenses would be pretax, based on my recommendation above, the HSA account would continue pretax deductions with tax free expenditures for medical care. HSA accounts would incentivize people to finance future medical expenses. What should be the allowable limit for HSA contributions? It’s open for discussion, but a dollar amount equal to the plans out-of-pocket maximum would make sense.
  • Any able body, able mind,  receiving a government subsidy for health care (Medicaid) should be required to do some form of work, be it ever so menial. Health insurance is expensive, everyone can do their part.
  • Major changes to medical liability and malpractice need to be made. I’ll let others suggest specific tort reform recommendations. But we need to get the attorneys to give up their strong hold on the medical market. It’ll help lower costs.

Finally, before you suggest eliminating insurance companies, I hope you’ll think about the import role they play in lowering health care costs. Health insurance companies, just like many items you buy, negotiate rates, buy in bulk, and monitor expenditures. Need proof? Look at your EOB (Explanation of Benefits). Compare the original billed amount to the allowed amount (after discounts).

I’m not saying they are perfect or that changes can’t be made. I’m just saying they play an important role and we need to recognize it. Insurance companies are much better than a bloated government agency with little or no accountability. We tried that with the VA health care and Obamacare. – No thank you!

What ideas do you have?


Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services. We can customize a wellness plan for your budget and culture.

Big Increase for 2017 Payroll Taxes while Social Security Benefits, Not So Much

The maximum earnings subject to the Social Security* payroll tax will increase by $8,700 in 2017 to $127,200 —up from $118,500. The Jan 1 adjustment is based on the government’s estimate of real wage growth. The 2017 increase in the taxable-earnings cap is the largest one-year increase since 1983.

Monthly Social Security benefits will increase a mere 0.3 percent in 2017. The Social Security Act ties the annual cost-of-living adjustment (COLA) to increases in the Consumer Price Index, as determined by the DOL’s Bureau of Labor Statistics.

Do you see the irony in these increases? Shouldn’t the adjustments be similar? Also, on one hand the payroll tax hike will increase the costs of goods and services, on the other the people won’t have enough to pay for the increase in goods and services.

*Social Security is financed by a 12.4 percent tax on wages up to the taxable-earnings cap, with half (6.2 percent) paid by workers and the other half paid by employers. The Medicare payroll tax rate is a matching 1.45 percent on all earnings.


Employee Benefit Advisors provides employee benefits. We are a broker helping companies with their Health & Welfare Benefits. We also help companies revaluate PEO Services, deciding if a PEO is a good choice and if so selecting and implementing the PEO.

Public Option and Single-Payer: What’s the Difference?

Both of these programs are public health insurance plans, but they are administered very differently and would have drastically different impacts on the healthcare system,

A public health insurance plan, also known as a “public option,” is a government-sponsored plan designed to compete alongside private insurers. It is intended to address the market failure where consumers are faced with only one or two health insurers offering coverage in their area. As a public plan it could have the power to dictate prices, provider networks, and provider reimbursements. It could also potentially indemnify itself for unexpected costs, allowing it to offer insurance at below-market costs.

Single-payer is a health insurance system that is wholly sponsored and administered by a single entity with no direct private market competition. Private insurers would not be able to offer any primary coverage, although in some proposals they would be able to offer supplemental coverage to those who choose to purchase. Providers would be compensated directly by the government, which would also set reimbursement rates, networks, and costs of services. Rationing of services would be among its strongest tool to control costs.

Existing public healthcare plans like Medicare and Medicaid already demonstrate the challenges faced by government-run insurance plans and their ability to provide adequate coverage to their beneficiaries. They may provide less coverage and restrict provider access more than the average employer-sponsored plan, with the Congressional Budget Office estimating that the benefit package for Medicare is 15% below the average employer-sponsored plan. Under Medicaid, specialists are often inaccessible without long waits. Extending this government-run coverage to all Americans would exacerbate these inefficiencies, high costs, and bureaucracy, along with unilaterally restricting consumer choice. Further, the experience of the ACA’s healthcare CO-OP program, where 16 of the 23 non-profit cooperatives failed after their first three years, demonstrates that challenges that would plague a fully government-run insurance plan.


Employee Benefit Advisor’s would like to acknowledge the National Association of Health Underwriters for the content of this blog. EBA is a member of NAHU.

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