The Insurance Super Blog

A Quick Guide To Operating Small (S) Corporations

Owning and operating a small business can be a very rewarding experience, emotionally as well as financially. Or it can be an absolute nightmare if you don’t structure and operate your business properly.Never underestimate the resources of a good lawyer and accountant. They can help you avoid problems and even get you out of trouble you may stumble into.The law considers your corporate a separate entity. It has a birthdate (the date of incorporation), and can have a death date (the date you close the corporation). It can enter into contracts and agreements and has the same responsibilities as you would.As a separate entity, your corporation can protect you from lawsuits and asset seizures arising from the operation of the corporation (as long as you are not personally negligent or irresponsible). Many people see this protection as the main reason for forming a corporation vs. operating as a sole proprietor without any protection.But in order to be considered a separate entity, you have to run your corporation according to some rule, laws and guidelines. The following information touches on two aspects of operating your corporation as a separate entity: Corporate Accounting and Corporate Minutes.Corporate AccountingYour corporation should have its own bank account and Employer Identification Number (EIN) issued by the IRS. This helps to establish the corporation as an entity, separate from its stockholders and officers.Accounting records should be kept to record income, expenses, assets (equipment, real estate, intellectual property, etc.) and liabilities (debts, loans, mortgages, etc.). It is recommended that you retain an accountant to help with the accounting functions, year-end taxes and payroll taxes.Your accounting system can be as simple as a set of spread sheets (on paper or a computer). Or you can purchase accounting software such as QuickBooks, Peachtree, MYOB, etc. You may want to have your accountant help you set up the computer software so that you have all the accounts you will need. Also your accountant can help you learn how to enter different transactions. (Don’t ask them during March, April or October - IRS tax deadlines.)Or consult with your accountant and develop a plan for recording your business activities and turning the information over to your accountant to be put into a computerized system either monthly or quarterly. This costs more for the accountant’s services but can save you a lot of time and headaches (and money) if you get in trouble with the IRS or your state/city taxing agencies.Corporate MinutesIncorporated businesses are required to keep minutes of the activities of the business. Minutes are the voice and history of the corporate entity and can be used in court cases. Minutes also show that the officers/stockholders of the corporation are operating the corporation as an entity and not just an extension of themselves. Officers and shareholders can lose the protection of the corporate entity if they do not operate the corporation as a corporation; this includes keeping accurate minutes.These minutes can be as simple as a dated note written on a piece of paper and inserted into a three ring binder. Corporate minutes don’t have to be on fancy paper or letterhead and don’t have to use any special language style (legalese, corporatese, etc.). Corporate minutes should be clear and understandable.It is recommended that the corporate minutes be typed, include a date, names of participants and signatures of participants or corporate officers.Things to include in the minutes: Authorization to open a bank or credit account. Major purchases of equipment, assets, other businesses. Summary of marketing or advertising campaigns. Summary of business growth initiatives, projections and goals. Business plan, mission statement, corporate objectives, etc. Quarterly and yearly financial records. Major stock sales, purchases or transfers (almost every stock activity in a small business will be “major”). List of stockholders, names, addresses, number of shares and percentage of total shares issued (update once a quarter with quarterly financials if any changes). Hiring, firing of corporate officers or contractors. Notes of board meetings and stockholders meetings (at least one official meeting with minutes should be held each year). Any other significant business events. ConclusionThere are few things more satisfying than building a business from scratch. There are few things more trying than fighting personal lawsuits and the IRS. Operating your corporation properly will allow you to focus on running your business rather than defending it or yourself. It takes an extra investment of time and money, but just consider it additional insurance, both financial and for your peace of mind. ***************************************************************© Simple Joe, Inc.David Berky is president of Simple Joe, Inc. a marketing company that sells simple software under the brand name of Simple Joe. One of Simple Joe’s best selling products is Simple Joe’s Money Tools - a collection of 14 personal finance and investment calculators. This article may be freely distributed so long as the copyright, author’s information and an active link (where possible) are included.

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Planning Your Future and Staying Bankruptcy Free

What exactly is bankruptcy? Bankruptcy is when your assets are tied up and you cannot pay your debts. There are a number of different bankruptcies that are open to individuals. These different bankruptcy options were created to help individuals and their special needs. However, bankruptcy’s effects can last for years, including difficulty finding a job, getting insurance, renting an apartment, buying a home and financing a car. Bankruptcy can stay on your credit record for up to 10 years. The rest of this article will deal with ways to try and avoid bankruptcy.As mentioned in previous articles a good budget is one of the most valuable financial tools you can have. Every individual or family needs to develop a budget and follow it. Impulse buying is not only dangerous for large expensive items, it can also be costly for smaller purchases that add up, killing your budget and pushing you further into debt.When going to buy a large or expensive item a good rule of thumb is to go and look and leave your checkbook, credit card, or financing information at home. When looking to buy these large items go and look around at more than one place. There is usually more than one store or dealer in the area that has comparable products to look at. The more places you visit the better idea you get of what a fair price is. Take time to evaluate the merchandise you have seen. When you do this, you will eliminate impulse buying or buying on emotion. When you have done your research and determined that you really need the item, then you are prepared to go and purchase it.Living within your means creates a future of financial stability. There are many things that can be done to live within our means. Some of these things include driving nice, dependable vehicles, not the latest and greatest; and purchasing a home that meets your needs, not a large home which carries an astronomical mortgage. Don’t get caught up in trying to impress your neighbor by buying things you can’t afford or don’t need. There is only one person that can keep you from bankruptcy and that’s you. Have some self control.If you find that you are really in overwhelming debt, there are steps that can be taken. Evaluate your financial circumstances. If you have large credit card debts that you can’t afford, contact the credit card company and try to work out a payment plan that works for you. If you have other large bills, try and contact these companies and see if they will work with you. Sit down and figure out what your debt to income ratio is. This can be done by adding up how much take-home pay there is against how much there is in bills. If your debt ratio is close to or higher than your income, then you need to seriously evaluate your spending habits. Unavoidable medical expenses or disasters that cause major debt have to be dealt with on an individual basis and may require the advice of a competent financial planner. Day-to-day financial monitoring will help you improve your financial future.If you need the help of a financial advisor, it will be worth your time to do your homework and find out who will be the best at helping you. There are a number of ways to go about finding a financial advisor. A good place to start is by asking friends and acquaintances if they know or have heard of anyone that is good. You can also check in the yellow pages. However, be aware of billboards and radio/TV ads, and check with your local BBB. Once you have found a good potential advisor, ask them about their credentials and ask for references of satisfied customers. Ask how their work will help you and how it will effect your credit. Don’t be afraid to ask questions to find out if this is the right person to help you. Remember this individual is going to give you advice that is going to effect your financial future. There are financial services that charge large service fees, and those that are non-profit that are less expensive. It will depend on what you feel comfortable with and who you think will give you the most help. Finally, if you own a lot of expensive items, you may think about trying to sell off items to raise money to pay off debt. Consider getting a second job to help to bring in extra income. Look at borrowing against any reserves you may have. (Do this only after consulting a good professional advisor.)Avoiding bankruptcy requires vigilance and determination. Bankruptcy and its long-term effects should be considered very carefully. Working hard to overcome financial woes will give you an improved sense of self-worth and well-being. ***************************************************************© Simple Joe, Inc.Lyle Evans is a software testing specialist for Simple Joe, Inc., makers of the popular Simple Joe’s Income & Expenses PC software. Income & Expenses is a quick and simple way to keep track of your cash flow and stay within your budget. Income & Expenses is ideal for personal, business, home and club accounting.. This article may be freely distributed as long as the copyright, author’s information and an active link (where possible) are included.

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Finding the Best and Right Mortgage Loans

The home mortgage might be biggest personal financial commitment of a borrower in his or her lifetime. Hence, it becomes very important to choose the right kind of home mortgage to save money as well as save from headaches which might crop up in the future. Mortgage is a kind of a pledge or guarantee made by the home purchaser or borrower to repay the loan to the lender. A right home mortgage loan can save thousands of dollars in the long run. Hence, it becomes very important and crucial to the borrower.

Important factors to be considered while selecting the right kind of mortgage loans:

The purpose for the borrower should be solved:

The home mortgage selected should fit the purpose of the home buyer. If the home purchaser intends to live in the house he has purchased then the most suitable will be the home mortgage loan while an investor will need a residential investment loan.

The loan structure:

The loan structure or the type of loan should suit the interests of the borrower. It depends on the fact whether the borrower is interested in the flexible paying option or whether he is interested to pay at regular intervals, or whether he is interested to go for a variable interest rate or a fixed interest rate, or requires an additional credit option for home improvements or for purchasing a car etc. The term of the loan should also be suitable for the borrower in selecting the right kind of mortgage loans.

Loan features too need to be considered by selecting the right kind of mortgage loans:

To find out the features of the loans enough homework has to be done to analyze each and every feature of the loan, for making the right selection of mortgage loans.

Features of many loan products are listed below for selecting the right mortgage loans:

Some loans offer credit facilities which can be used for home improvements and furnishings by increasing the credit limit of the current loan. This avoids the need to go to another lender for borrowing money.

Certain loans allow additional repayments through which the borrower can pay from their year end bonuses. This option saves thousands of dollars for the borrower and also reduces the loan period considerably.

Accounts consolidation option helps to merge all the transactions. It simplifies the banking, saves money paid as interest towards the loan making every penny working for the benefit of the borrower.

The option of income transferred to the loan account helps the borrower to save interest calculated on the mortgage, while allowing to access cash or allows to pay bills by making automatic transfers set into another transaction account.

Linking the mortgage with the borrowerâ??s transaction account enables every single dollar in the transaction account to offset the interest calculated on the mortgage.

Parental leave option helps to reduce the repayments up to 50% for nearly six months time which is again subject to certain conditions and terms.

Redraw option allows to get access to additional money paid over and above the normal schedule of repayments. Refix option allows to get into another fixed interest loan at the end of the present fixed interest rate term period.

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Making Changes to Your Enrollment Roster

Health insurance companies face increasing pressure to stay competitive in today’s marketplace. Having a competitive stance goes beyond offering affordable health benefits packages — it also involves having superior service, such as an efficient billing and enrollment process, that provides a hassle-free experience for customers.

The majority of billing and enrollment tasks involved in administering your health benefits plan are the responsibility of your health insurance carrier. However, understanding the role you or your company’s benefits administrator plays in maintaining a current enrollment roster is integral to establishing a positive working relationship with your health insurance carrier.

Carefully reviewing your roster, making changes in a timely manner and understanding your carrier’s retroactive change policy will help ensure accurate billing and that your employees receive access to covered services.

Review your membership/enrollment roster.

Typically, your monthly health insurance invoice will include a membership or enrollment roster that indicates the current number of covered employees and their dependents. Review this roster carefully and communicate any discrepancies.

Notify your carrier of membership changes.

Throughout the year, it may become necessary to make changes to your company’s enrollment roster — you hired a new employee, an employee had a baby or someone left your company. Whether you are adding or removing individuals, reporting these changes in a timely manner will help ensure that they are reflected on your next monthly bill.

Understand the importance of effective dates.

When making a change to your company’s membership roster, it’s important to clearly indicate the date the change should take effect. Furthermore, when adding an employee and/or a dependent, inform your health benefits company prior to the effective date. This enables your carrier to complete the entire enrollment process and helps ensure that the new member has access to covered health care services by his or her effective date.

Understand retroactive additions and terminations.

Retroactive additions and terminations are membership changes that are communicated after the effective date. Most health benefit companies have restrictions on how long employers have to make a retroactive change and also have policies about the types of documents that must be submitted with the request.

The process of making enrollment changes varies from company to company — the above tips should only serve as a guide. Be sure that you or the company’s benefits administrator know your health insurance carrier’s specific policies. Knowing the process and how to navigate the system will help both companies — yours and your health insurance carrier — achieve the mutual goal of providing your employees with a positive and hassle-free health plan experience.

KRIS HAMMOCK is senior director of enrollment and billing for VISTA, a health benefits company headquartered in South Florida with more than 300,000 members. She spearheads the commercial enrollment and billing operations for the company. With 14 years of health insurance experience, Hammock has been involved in various aspects of the industry, including claims, customer service and utilization management. Reach her at http://www.vistahealthplan.com

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What is the Definition of Primary Health Care?

Coordination of Benefits (COB) is a process by which two or more insurers who are insuring the same person for the same or similar group health coverage limit the total benefits received by the insured. The primary health care is the health insurance that will pay first on medical claims. Secondary health insurance will pay after the primary health insurance pays their portion. At no point will the combination of primary and secondary health insurance pay more than 100% of the claim that is being paid.

An employee is always primary on his or her own coverage. A spouse who is covered under a group plan would be secondary on the spouse’s plan. Dependents are covered on a primary basis by the health plan of the spouse with the earliest birthday during a calendar year also known as the birthday rule.

For example, Jim Ventrusca has health insurance for himself through his employer and he is also covered under his wife’s plan. If Jim, had gall bladder surgery that cost $5,000 his plan would be primary and pay after he has met his deductible. Let’s say Jim’s health plan had a $500 deductible and his wife’s plan had a $250 deductible. Jim’s primary health care plan by definition will pay after his $500 deductible is met. Once the coinsurance maximum is met then the secondary payor will pay on the claim.

In our example above, the surgery cost was $5,000 and Jim will pay the first $500 fully out of his pocket. The remainder is $4,500 which in our example is paid at 80% up to an annual out of pocket maximum of $2,500. So Jim is responsible for 20% of the remaining $4,500 or $900.

Jim’s wife has a plan that he is secondary on and this plan will pay the $250 deductible that Jim has through his wife’s employer. This secondary payment allows Jim to collect back a portion of his $500 claim. There may also be coordination of benefits on the coinsurance depending upon the plans that are being coordinated by the two health insurers involved. Coordination of benefits also occurs on other claims for dental, vision and other employee benefits offerings.

The definition of primary health care or health insurance is a complex transaction. Talk to your human resources department if you want more information on how coordination of benefits will work for your specific case. Understanding which plan is primary and how the coordination of benefits process works can save you money in the long run. However, you should always evaluate what the cost of insurance is for you. How much do you pay per pay period and how much does your spouse pay as well. You may be overspending relative to the potential payout from coordination of benefits.Cheap Car Insurance

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