Thursday, October 31, 2013

Change to Cafeteria Plan

IRS Notice 2013 -71 now permits § 125 cafeteria plans to be amended to allow up to $500 of unused amounts remaining at the end of a plan year in a health FSA to be paid or reimbursed to plan participants for qualified medical expenses incurred during the following plan year, provided that the plan does not also incorporate the grace period rule. This carryover of up to $500 does not affect the maximum amount of salary reduction contributions that the participant is permitted to make under §125(i) of the Code ($2,500 adjusted for inflation after 2012). This carryover option provides an alternative to the current 2½ month grace period rule and administrative relief similar to that rule.

Wednesday, October 2, 2013

Obamacare enrollment

This won't affect most people as they're either covered by an employer health plan or by Medicare. But it may affect some of their children and friends.
This is the California exchange site. The Spanish web portal isn't ready yet and I don't know if they plan to have any other language portal.

The federal web site,, has had many problems on its first day. But there is plenty of time to sign up.

It's questionable whether healthy young folks should sign up purely from a financial point of view. The plan calls for young insureds to subsidize the elderlies. Their premium will therefore be high.

There are four different plans, all with the same coverage. The difference is the amount of monthly premium vs the amount of annual deductibles and co-pays. The Platinum plan has the highest premium but the lowest deductible and co-pay. So if one needs extensive medical care, s/he should sign up for the Platinum plan.

People making up to 400% of poverty level will get federal subsidies on a sliding scale. But if you make just $1 over that threshold, you will lose the entire subsidy. On a family plan, even if one family member is covered by an employer health plan, you will lost the federal subsidy as well. That's why some people have suggested Obamacare may discourage marriages and encourage divorces.

To get the federal subsidy, one must sign up through the exchanges.

The administration has been touting employers could get up to 35% tax credit for providing their employees with health insurance, but that's a myth in most cases.