The Money Mom: Health Care – Just One More Expense

Health Care – Just one more expense

President Barack Obama has made into law that everyone will be covered by some health plan.  Who is paying for it?  You are if you own a business.  Don’t get me wrong, it will be great to have health care insurance for those that don’t. It would have been nice for the plan to spread the cost more evenly.  Business owners are trying to stay afloat as it is.

Beginning in 2014, if your business has  more than 50 employees and you don’t offer affordable coverage, you  will pay a penalty starting at $750 a year per full-time employee under the bill approved by the Senate and House of Representatives.

They are still debating the amount and could be raised to $2,000. Employers with 50 or fewer employees would be exempt from these penalties.  If your business has more than 200 workers, you would be required to enroll employees automatically into health-insurance plans you offer. Employees can opt out if they choose.

The tax credits are for small employers. For tax years 2010 through 2013, if you have no more than 25 employees and your average annual wages are less than $50,000 for those you purchase health insurance for, you would receive a tax credit.

Beginning in 2014, if you qualify, those small businesses that purchase coverage through new state exchanges can also receive a tax credit for their payment toward the employees’ health-insurance premium. It is my understanding that the legislation calls for the creation of state-based exchanges through which consumers and small businesses can purchase health coverage.

Will this help or hinder small business ?

The National Federation of Independent Business, (NFIB) says the proposal will burden employers and threaten broader economic recovery and that there will be few businesses will qualify for the tax credit.

The President commented that health-care costs may be a burden on businesses but says it’s only fair that larger employers (50 employees or more) share the responsibility for making sure employees have health-care coverage. Sure, why not. No one else wants to pay for it!

The Money Mom

GoRapids.com The Money Mom: Cash For Caulkers

Cash for Caulkers!

President Obama proposed a new program Tuesday that would reimburse homeowners for energy-efficient appliances and insulation, part of a broader plan to stimulate the economy. There aren’t details yet, but Congress is working on it. Steve Nadel, director at the American Council for an Energy-Efficient Economy, who’s helping write the bill, said a homeowner could receive up to $12,000 in rebates.
We know energy efficiency “creates jobs, saves money for families, and reduces the pollution that threatens our environment,” Obama said. “With additional resources, in areas like advanced manufacturing of wind turbines and solar panels, for instance, we can help turn good ideas into good private-sector jobs.”

The program contains two parts: money for homeowners for efficiency projects, and money for companies in the renewable energy and efficiency space. The plan will likely create a new program where private contractors conduct home energy audits, buy the necessary gear and install it, according to a staffer on the Senate Energy Committee and Nadel at the American Council for an Energy-Efficient Economy.  Nadel continued to say higher cost items like air conditioners, heating systems, washing machines, refrigerators, windows and insulation would likely be covered.
You might be eligible for a 50% rebate on both the price of the equipment and the installation, up to $12,000, said Nadel. So far, there is no income restriction on who is eligible. That would mean a household could spend as much as $24,000 on upgrades and get half back.
If you took full advantage of the program, you might see your energy bills drop as much as 20%, he said. The program is expected to cost in the $10 billion range.

It’s not clear how the home efficiency plan would be administered – the government may issue rebates to consumers directly, homeowners might get a tax credit, or the program could be run via state agencies.  If consumers have to spend a lot of money up front to get the credit, it could throw a wrench in the works, David Kreutzer, an energy analyst at the Heritage Foundation, told CNN.  “This will not be something that’s attractive to people who are having trouble already making their budget payments month to month or week to week,” he said.  To keep consumers from having to spend thousands of dollars before getting reimbursed, Nadel said, one idea is to have contractors or big box retailers pay part of the cost up front. Fraud issues could also come up, Kreutzer said.  “Any program that is going to run through a third party and is going to distribute billions of dollars needs to have lots of checks and balances to make sure there’s not abuse,” he said. Nadel noted that as a way to guard against fraud, contractors would have to be certified to participate.
 
We will keep up with the news for this program.  Every little bit helps.

The Money Mom

GoRapids.com Money Mom: Recovered or Not Recovered

Federal Reserve Chairman Ben Bernanke said a few days ago, “ The “technical” U.S. recession is most likely over.”

Hurray! Wait, really? He continues, ”Economic forecasting is not one of your most precise sciences … and so we are forced, because policy must be forward looking, because policy has to take into account the lags of effects of monetary policy actions and so on, we have to do our very best to try to figure out what the most likely scenarios are, recognizing that day by day, as new information comes in, we may have to revise that.

“Now, having said that, I’ve seen some agreement among the forecasting community at this point that we are in a recovery, that we will see growth in the third quarter continuing and that growth will continue into 2010. But the general view of most forecasters is that that pace of growth in 2010 will be moderate, less than you might expect given the depth of the recession because of ongoing headwinds, including still ongoing financial and credit problems, deleveraging by households, the needs for adjustments in the economy, sectoral adjustments in the economy, the need for fiscal exit at some point — many, many factors that will likely make the 2010 recovery moderate, and, in particular, not much faster than the underlying potential growth rate of the economy.

“And the arithmetic is that unless the economy grows significantly faster than its longer-term growth rate it will be relatively slow in creating jobs over and above those needed to employ those coming into the labor force and, therefore, the unemployment rate would tend to come down quite slowly.

“So, that’s a risk, that’s a possibility.

“Of course there are risks on both sides of that forecast. We could have a stronger recovery; we could have a weaker recovery. But if we do in fact see moderate growth, but not growth much more than the underlying potential growth rate, then unfortunately unemployment will be slow to come down. It will come down, but it may take some time.

“Obviously, that’s a very serious concern and that’s one reason why even though from a technical perspective the recession is very likely over at this point, it’s still going to feel like a very weak economy for some time as many people will still find that their job security and their employment status is not what they wish it was. And so that’s a challenge for us and all policymakers going forward.”

So we are recovered, but not. That is the answer.

The Money Mom

GoRapids.com Money Mom: What’s Wrong With The Word “Local”?

I try really hard to support my local economy.  It’s those local shops and owners that make America unique, and this economic downturn is tougher on them than on the big guys.

I look around Portage and Wood County, and see all of these unique establishments closing their doors because people are shopping at business that are even foreign owned just to save a buck or two. These quaint towns are losing their local flavor. It makes me so sad! Target, Wal-Mart, etc.  Each town looks the same.

In addition to shopping at local stores, you can also buy your food from local farmers. Just ask around or see the white produce tents in your community. Or you can go to LocalHarvest.org. This is a site that allows you to find places to purchase locally grown food. Just type in your zip code and find a local farmer near you.  You know, it is fresher than anything in the supermarket and that means it is tastier and more nutritious. It is also good for your local economy – buying directly from family farmers helps them stay in business. In addition, some supermarkets are buying from the local farmers. Look at the packaging. It is easy to see Wisconsin on a bag of potatoes than Idaho!

Another reason is that if you buy locally it reduces the fuels burned getting produce from, for example Latin America, to the US. If demand for foreign produce were reduced enough, it would certainly have an impact. Right?

Buying local keeps the economy up in our area. I know, I’ve heard it said, “Why should I care? I just want to save money.” Just consider the long-term effects on your town.

The Money Mom