Prospecting Using the Tax Credit

[ABC]

I thought this might be a good topic to discuss.

Is anyone having success prospecting with the tax credit?

I have yet to sell a new case with the tax credit being the reason.

The media has put some spin out there talking about small groups putting plans in place because of the tax credit.

Thoughts?

 

[arnguy]

I think that Bob Levine posted information on that on another thread.

 

[Full Throttle]

I've found it relatively tough for groups to qualify for much. To get much of a benefit, the companies need to be paying on average around $15 or less per hour and 15 or fewer employees (above those levels there isn't much of a credit left).

So basically, micro businesses with unskilled labor. Not exactly a target market for group benefits, especially with the job market favoring employers.

A few opportunities, yes. Over hyped, yes as well.

 

[somarco]

Just another stupid government trick. As mentioned, it is hard to qualify for the credit. Also, the credit won't last forever.

Just like the Cash 4 Clunkers tax credit, and home buyers tax credit, the only ones taking advantage were those already considering buying a car or home.

 

[Full Throttle]

the only ones taking advantage were those already considering buying a car or home.

Exactly. I have a meeting in an hour with a small business that wants to start a health plan and fits the criteria for the credit well (small retail "mom and pop" wanting to provide a plan for their three employees). They would have started one anyway, but using tax payer dollars for a healthy portion of the premiums makes it even better.

 

[Bob_The_Insurance_Guy]

I did post about it as a possible selling feature, but I did put in the caveat that I am not a Tax adviser, and they should talk to their tax specialist first.

I would not lead with it. You will get burned and I don't believe your E & O will cover you.

Just found out yesterday that while the employer might qualify for the tax incentive, the employee will actually be taxed at their rate.

 

[Full Throttle]

Just found out yesterday that while the employer might qualify for the tax incentive, the employee will actually be taxed at their rate.

Can you explain this further. The employee will be taxed at the amount the employer pays in premiums (or the credit amount)?

Or do you mean the employee will pay their full share of the premium like they always have been without receiving a credit.

 

[somarco]

while the employer might qualify for the tax incentive, the employee will actually be taxed at their rate.

Wow! Got a reference link? Not doubting you, but this is not something that is widely known.

 

[Bob_The_Insurance_Guy]

Here you go:

http://www.nytimes.com/2009/03/15/us/politics/15health.html?_r=1

 

[somarco]

Thx #2, but that reference is from a year ago. While it may still be in play the one thing that did survive is the tax on Cadillac plans.

Of course under the current regime, anything that is not nailed down or dead is subject to taxation.