Friday, November 30, 2012

Affordable Care Act/ Injury and Illness Prevention Seminar.

I am frequently asked about the timeline for the Affordable Care Act .I am sending in the link below the timeline for individuals from 2010 to 2018. Of particular note for many of you that have high deductible plans is that in 2014 they cannot exceed 2000 per individual and $4000 per family. I have heard from some that about 50% of the current high deductible plans exceed these limits Also effective 2014 is Out of Pocket Maximums are $5950 for individuals and $11,900 for families and the elimination of annual caps by insurers.

I am not sure how much these changes will increase premiums but it certainly will have an impact if you are not getting subsidies

Link for HCRs Impact on individuals:

For those of you in the Oakland area Small Business California has been working on putting together seminars to assist small business in developing an Injury and Illness Prevention Program. For those of you in the Oakland area there will be seminars December 13 and 18. See information below

For those that attend you will leave with a pretty much completed IIPP and will be well on your way in complying with OSHA requirements.

I have in attachments additional information about IIPPs and a registration form.

Scott Hauge


Small Business California

2311 Taraval Street

San Francisco, CA 94116


Dear Small Business Owner/Manager:

We are writing to invite you to an important FREE half-day training class on how to develop an effective health and safety program that meets the requirements of Cal/OSHA’s Injury and Illness Prevention Program (IIPP) standard. The IIPP standard is the #1 most often cited Cal/OSHA violation when inspectors visit California workplaces.

This hands-on training is being conducted by University of California Berkeley trainers and Cal/OSHA Consultation Service staff. Two dates are provided. Please indicate on the registration form which date you will attend.


• A free IIPP template and a Guidebook on how to write your IIPP.

• Free resource materials and tools to help you establish and implement your safety program.

• A free training guide to help you teach and engage your employees in safety.

• Advice on how to comply with the IIPP standard from Cal/OSHA staff.

• For SCIF policy holders, a $200 rebate on your workers’ compensation premium.


Thursday, December 13, 2012 -or- Tuesday, December 18, 2012, 8:30 a.m.–12:30 p.m.

State Office building, 1515 Clay Street, Room 11, Second Floor, Oakland, CA 94612.

Due to building security procedures, we recommend you arrive at least 15 minutes early.


Complete the attached registration form and return it to:

LOHP, UC Berkeley, 2223 Fulton Street, 4th Floor, Berkeley, CA 94720 by December 6.

The classes have a limited number of spaces so register early.

For more information, contact Robin Dewey at 510-642-2477 or

This interactive, informative training is being co-sponsored by the University of California Berkeley’s Labor Occupational Health Program, the CA Department of Industrial Relations, Cal/OSHA, State Compensation Insurance Fund, Small Business California, and California Small Business Association.



BERKELEY, CA 94720-5120

(510) 642-5507

(510) 643-5698 FAX



Thursday, November 29, 2012

Pacific Business Group on Health

I am on the Board of the Pacific Business Group on Health This is a group of very large employers including the Boeing Target, Safeway and the University of California. I was asked to join the Board after they shut down Pac Advantage.

Their Mission Statement is ;

To improve the quality and availability of health care while moderating cost. PBGN works on many fronts to improve the quality and affordability of health care, in close partnership with our members, health plans, physician groups, hospitals consumer organizations , and others concerned about our health care system. Through an annual Member review, initiatives are chosen to advance our mission and further the organizational goals.

They are a very effective organization and hold a lot of influence on public policy.

My question to you is how do you think California small businesses can work most effectively with PBGH. Obviously we have common goals especially in the area of driving down the cost of health care and improving the quality and outcomes in our current system.

They are in the process of doing their annual review and I would like to relay your thoughts.

Scott Hauge


Small Business California

2311 Taraval Street

San Francisco, CA 94116


Wednesday, November 28, 2012

New Indexed Figures for 2013

I thought this was good information for small businesses to know. I ran this by a friend who is an accountant and he said cross checked some of the information and it is right

Scott Hauge


Small Business California

2311 Taraval Street

San Francisco, CA 94116


New Indexed Figures for 2013

The Internal Revenue Service (IRS) and Social Security Administration have released the cost-of-living (COLA) adjustments that apply to dollar limitations set forth in certain IRS Code Sections. The Consumer Price Index rose enough since the third quarter of last year to warrant an increase in some indexed figures for 2013.

Social Security and Medicare Wage Base

For 2013, the Social Security wage base increases to $113,700 from $110,100 in 2012. Unless Congress acts to extend the current reduction in the tax rate for employee withholdings, they will increase to 7.65 percent in 2013 from the 5.65 percent withheld in 2012. The Social Security rate of 6.2 percent is applied to wages up to the maximum taxable amount for the year; the Medicare portion of 1.45 percent applies to all wages.

Indexed Compensation Levels

The indexed compensation levels for determining who is considered highly compensated or a key employee remains unchanged for 2013:

2010 2011 2012 2013

Highly Compensated Employee $110,000 $110,000 $115,000 $115,000

Top Paid Group of 20% $110,000 $110,000 $115,000 $115,000

Key Employee, Officer $160,000 $160,000 $165,000 $165,000

401(k) Plans

In 2013, the maximum for elective deferrals increases to $17,500. The catch-up contribution for those 50 or older remains at $5,500 for 2013 (no change from 2012). That means if you are age 50 or over during the 2013 taxable year, you may generally defer up to $23,000 into your 401(k) plan.

Health FSA

We have an additional indexed figure to track starting in 2013. It’s the annual limit for participant salary reductions for the health flexible spending account (FSA). For plan years starting on or after January 1, 2013, the participant salary reduction amount to the cafeteria plan’s health FSA portion of the plan may not exceed $2,500. This cap does not include employer contributions. However, employer flex credits that may be converted to cash must be added to the participants' health FSA elections.

Adoption Credit

Unless Congress acts, this tax credit will expire at the end of 2012. Parts of the adoption tax credit, under IRS Code Section 23, will expire on December 31, 2012. The remaining section of Code Section 23 will allow for a $10,000 credit for adoption of a child with special needs, regardless of expenses.

A "special needs" adoption, which becomes final during a taxable year, will be deemed to have qualified expenses in an amount equal to the excess (if any) of $10,000 over the aggregate qualified adoption expenses actually paid or incurred.

There will be no adoption-related benefits allowed under a cafeteria plan arrangement starting January 1, 2013, unless Congress updates current legislation.

Because the credit is set to expire at the end of 2012, no indexed figures were released for the 2013 taxable year.

Health Savings Account (HSA)

Minimum deductible amounts for the qualifying high deductible health plan (HDHP) increase to $1,250 for self-only coverage and $2,500 for family coverage in 2013. Maximums for the HDHP out-of-pocket expenses increase to $6,250 for self-only coverage and $12,500 for family coverage.

Maximum contribution levels to an HSA also increased for 2013 to $3,250 for self-only coverage and $6,450 for family coverage. The catch-up contribution allowed for those 55 and over is set at $1,000 for 2013. Remember, qualifying HDHPs and no other impermissable coverage (such as coverage under another employer’s plan or from a health care flexible spending account that is not specifically compatible with an HSA) are required in order to fund an HSA.

Archer Medical Savings Account (MSA)

For a high deductible insurance plan that provides self-only coverage, the annual deductible amount must be between $2,150 and $3,200 for 2013. Total out-of-pocket expenses under a plan that provides self-only coverage cannot exceed $4,300. The annual deductible amount must be between $4,300 and $6,450 for a plan that provides family coverage in 2013, with out-of-pocket expenses that do not exceed $7,850.

Although new MSAs are not allowed, maximum contributions to an existing MSA that are attributable to a single-coverage plan is 65% of the deductible amount. Maximum contributions for a family-coverage plan are limited to 75% of the deductible amount. MSA contributions must be coordinated with any HSA contributions for the taxable year and cannot exceed the HSA maximums.

Dependent and/or Child Day Care Expenses

Just a reminder that although the day care expense limit associated with a cafeteria plan is not indexed, the tax credit available through a participant’s tax filing was raised in 2003. The day care credit must be filed on Form 2441 and attached to the 1040 tax filing form.

For 2013, unless Congress acts, the limits for the day care tax credit expenses will be reduced and based on $2,400 of expenses covering one child and $4,800 for families with two or more children. If one of the parents is going to school full time or is incapable of self-care, the non-working spouse would be "deemed" as earning $200 per month for one qualifying child and $400 for two or more qualifying children. This "deemed" earned income is used whether a person is using the employer’s cafeteria plan or taking the day care credit.

The cafeteria plan day care contribution limit is $5,000 for a married couple filing a joint return, or for a single parent filing as "Head of Household." For a married couple filing separate returns, the limit is $2,500 each.

The day care credit is reduced dollar for dollar by contributions to or benefits received from an employer’s cafeteria plan. An employee may participate in their employer’s cafeteria plan and take a portion of the day care expenses through the credit if they have sufficient expenses in excess of their cafeteria plan annual election, but within the tax credit limits.

Long-Term Care

For a qualified long-term care insurance policy, the maximum non-taxable payment is now $320 per day for 2013.

Finally, by participating in a cafeteria plan, the participant will be lowering their income for the Earned Income Tax Credit (EITC). Check out the new limits in IRS Publication 596 "Earned Income Credit" and for more information about this tax credit.

The information contained in this memo is not intended to be legal, accounting, or other professional advice. We assume no liability whatsoever in connection with its use, nor are these comments directed to specific situations.


1100 Park Place, 4th Floor

San Mateo, CA 94403


No information contained herein is intended to be legal, accounting or other professional advice. We assume no liability whatsoever in connection with your use or reliance upon this information. This information does not address specific situations. If you have questions about your specific situation, we recommend that you obtain independent professional advice.


New Tax Laws

There have been many recent tax law changes. For more information about these new tax laws, please visit our website at

IRS CIRCULAR 230 NOTICE: Please be advised that, based on current IRS rules and standards, the advice above was not intended or written to be used, and it cannot be used by the taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. If this message is provided in any manner to another taxpayer, he or she cannot use the advice and should seek advice based on his or her own particular circumstances from an independent tax advisor.

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Wednesday, November 21, 2012

D&B/Flow Chart Under Affordable Care Act

You may remember that in previous emails I brought to your attention that the Dunn and Bradstreet Credibility Corporation had contacted me saying that there had been a number of inquiries into my companies credit and that they could help us clear it up if we hired them. I found out that there was no problem with my credit. They taped the conversation without my knowledge .

I sent an email out and many of you also had received these calls and were told that the cost of hiring them would be $400 to $700.

Yesterday I heard from an attorney saying that they had been investigating this company for several months and they have uncovered evidence supporting that the company engages in fraud and unlawful business practices and planned to bring a class action law suit against them.

Please see a Chart entitled Penalties for Employers Not Offering Affordable Coverage Under the Affordable Care Act beginning 2014. Note this is only for businesses with 50 or more employees as smaller business are not required to provide health coverage.. It is not clear to me if it is accurate for employers with 200 or more employees as they will be required to enroll employees in their health plan.

Have a wonderful Thanksgiving and enjoy the time with your family. If you happen to go shopping over the Holidays remember to shop at your local small business.

Scott Hauge


Small Business California

2311 Taraval Street

San Francisco, CA 94116


Tuesday, November 20, 2012

Stakeholder Mailing: 1) TODAY, ACA Call @ 12pm PT to Discuss Proposed Rules Issued Today

One of my goals with Small Business California is to be you updated on what is happening with implementation of the Affordable Care Act. Please see latest from Herb Schultz about the elimination of preexisting conditions which will take effect 2014 and wellness.

If you are interested you could call in at noon.

Scott Hauge


Small Business California

2311 Taraval Street

San Francisco, CA 94116


NOTE FROM: Herb K. Schultz, Director, Region IX

SUBJECT: Obama Administration Moves Forward to Implement Health Care Law, Ban Discrimination Against People with Pre-Existing Conditions

Obama Administration Moves Forward to Implement Health Care Law, Ban Discrimination Against People with Pre-Existing Conditions

Please join senior officials from the U.S. Department of Health and Human Services and the U.S. Department of Labor on TODAY at 12:00pm PT for a conference call to discuss proposed rules issued earlier today.

WHO: Gary Cohen, Director, Center for Consumer Information and Insurance Oversight, HHS

Daniel Maguire, Director, Office of Health Plan Standards & Compliance Assistance, Employee Benefits Security Administration, DOL

WHEN: 12:00 PM (PT)

Tuesday, November 20, 2012

CALL-IN: 888-810-9644


If you are unable to join this conference call, a recording of the call will be available for 30 days by calling 800-925-3941.

The Obama administration moved forward today to implement provisions in the health care law that would make it illegal for insurance companies to discriminate against people with pre-existing conditions. The provisions of the Affordable Care Act also would make it easier for consumers to compare health plans and employers to promote and encourage employee wellness.

“The Affordable Care Act is building a health insurance market that works for consumers,” said Health and Human Services Secretary Kathleen Sebelius. “Thanks to the health care law, no one will be discriminated against because of a pre-existing condition.”

“The Affordable Care Act recognizes that well-run, equitable workplace wellness programs allow workers to access services that can help them and their families lead healthier lives,” said Secretary of Labor Hilda L. Solis. “Employers, too, can benefit from reduced costs associated with a healthier workforce.”

The Obama administration issued:

• A proposed rule that, beginning in 2014, prohibits health insurance companies from discriminating against individuals because of a pre-existing or chronic condition. Under the rule, insurance companies would be allowed to vary premiums within limits, only based on age, tobacco use, family size, and geography. Health insurance companies would be prohibited from denying coverage to any American because of a pre-existing condition or from charging higher premiums to certain enrollees because of their current or past health problems, gender, occupation, and small employer size or industry. The rule would ensure that people for whom coverage would otherwise be unaffordable, and young adults, have access to a catastrophic coverage plan in the individual market. For more information regarding this rule, visit:

• A proposed rule outlining policies and standards for coverage of essential health benefits, while giving states more flexibility to implement the Affordable Care Act. Essential health benefits are a core set of benefits that would give consumers a consistent way to compare health plans in the individual and small group markets. A companion letter on the flexibility in implementing the essential health benefits in Medicaid was also sent to states. For more information regarding this rule, visit

• A proposed rule implementing and expanding employment-based wellness programs to promote health and help control health care spending, while ensuring that individuals are protected from unfair underwriting practices that could otherwise reduce benefits based on health status. For more information regarding this rule, visit:

We have attached the full press release for your review.

Herb K. Schultz

Regional Director, HHS Region IX

90 7th Street, Suite 5-100

San Francisco, CA. 94103

(0ffice) 415-437-8500

(Direct) 415-437-8502

(Cell) 415-265-7049

Wednesday, November 14, 2012

Worker Compensation/SBDCs/IIPP

For those of you who have your workers compensation coming up Jan1 or later expect a rate increase that could be substantial especially if you are in a higher hazard industry. State Fund has filed for a 7% decrease but I believe they will be the exception.

I wish I could tell you how much the increase will be but I just don’t know. Companies are in the process of determining what their filings will be. The reason for the increase is that the industry loss ratio is around 138%. While the workers compensation reforms should reduce the rate increase it still will be substantial for many.

You should also be aware that you will probably receive your renewal quote late because of the companies figuring out what there filings will be. This really creates problems for many of you that are bidding on work next year. You get locked into a bid and then find out your cost are considerably more than you expected.

I will be meeting today with a major financial institution asking them to provide money for the Small Business Development Centers around the state. I have 25 associations cosigning. This is really important to small businesses around the state as the money they raise gets matched by the SBA.

Yesterday I met with some people at Cal OSHA around the issue of Injury and Illness Prevention programs which every employer around the state is required to have. As I have said before this is the number one citation OSHA hands out. It was interesting that most of their citations were not for not having an IIPP but for not making it effective. Make sure you let your employees know about the plan and that they all have access to it. You should bring the IIPP up at safety meeting and get your employees involved in making your workplace safe. To set up an IIPP and to make sure it complies with OSHA go to

For those of you in the Oakland area there will be two four hour seminars in how to set up an IIPP and how to comply with OSHA.Small Business California is cosponsoring this. It will be Thursday Dec 13 and Dec 18 from 8:30 to 12:30 at 1515 Clay Street Room 11 second floor., If you are interested in attending let me know and I will send you a registration form

Scott Hauge


Small Business California

2311 Taraval Street

San Francisco, CA 94116


Monday, November 12, 2012

Health law guide for business

You all know that we have a serious deficit and the so called fiscal cliff is quickly approaching. A number of ideas have been floated to resolve the debt issue as indicated by Simpson Bowles.

I have heard that the idea of eliminating or modifying the mortgage deduction may be seriously considered. What do you think about this?

Also being considered is an increase in the capital gains tax. Thoughts?

I asked a question in a previous email about Exchanges and whether you will be considering them for health insurance for you and your employees. It seemed pretty clear that a number of you are not very familiar with how the Exchanges will work. Please see below a couple of websites that may be useful to you in getting more information about them. Keep in mind they will not be in place until 2014.

Health law guide for business

Insure the Uninsured Project.

Scott Hauge


Small Business California

2311 Taraval Street

San Francisco, CA 94116


Friday, November 09, 2012

Exchange/ Independent Contractors/ Social Media

I have been contacted by a few people asking if small businesses are going to be looking at placing their health insurance in the Exchange created by the Affordable Care Act[ now being referred to as Obama care]. Please give me your thoughts on this. Here are some questions

1. If you currently have insurance for your employees will you be looking at the Exchange for your coverage?

2.If you don’t have insurance will you be looking at the Exchange to provide this for your employees?

3. If you are a sole proprietor will you be looking at placing your individual coverage with the Exchange

4. If you are a sole proprietor have you had problems getting insurance because of a health problem? Remember come 2014 medical conditions will not be a factor in obtain insurance?

In a previous email I asked the question; Do you hire independent contractors? I admit it was a trick question and most of you that answered the question fell into the trap. You do not hire independent contractors. Hire is a term that implies employment and could be a red flag in the event of an EDD or IRS audit. The answer to the question is that you contract with independent contractors.

I did not get many answers to my question about do you use social media and if so how effective is it to you in getting business. Most of the answers I did get said for a variety of reasons you don’t use social media. Is that really true?

Scott Hauge


Small Business California

2311 Taraval Street

San Francisco, CA 94116


Wednesday, November 07, 2012

Election/ SBA Venture Capital Program/Independent Contractors

Tomorrow I will be speaking to a group of woman small business owners about the election. The topic will be how it impacts small business on a National and State basis.

What are the your thoughts? Do you think that given the results we are facing more gridlock at both the National and State level? Did the passage of Prop 30 signal a willingness of Californians to pay more taxes?

The SBA licensed Small Business Investment Companies provided about $3 billion in funding to 1094 small businesses in fiscal 2012 ending September30. This is a 14 % increase compared to the previous year.

The SBA provide $1.92 billion in loan guarantees to SBICs in 2012 and these 301 firms raised $1billion in private capital.

The SBA issued 30 new SBIC licenses in 2012 compared to 22 the prior year.

Venture capitalist overall invested $6.5 billion in 890 deal during the third quarter down 11%.

This is a real turnaround as SBICs declined from 2005 to 2010. Thanks Kent for this story

This may sound like a silly question but I have purpose in asking. Do you hire Independent Contractors? When you answer I will tell you why this is important.

Scott Hauge


Small Business California

2311 Taraval Street

San Francisco, CA 94116


Tuesday, November 06, 2012

Small Business Biggest Problem

What is the biggest problem for small business. Some would say the cost of health insurance, others would say regulations,access to capital, taxation etc. I would contend the biggest problem for small business is our own apathy.

In a Pew survey in 2010 71% of respondents felt positive about small business. This was higher than any other people listed like doctors, and firefighters. There are about 27 million small businesses in the US and about 3.5 million in California.

So with these numbers and the respect we have from the public why aren’t we more effective in getting our views heard? I think the answer is pretty simple. Most of us do not make our voices heard.

In the Small Business California survey 59% of the respondents have never written to their representatives in government.

Now you may be saying to yourself’ I don’t have time and they don’t listen anyway” Well that becomes a self fulfilling prophecy. You don’t need to spend a lot of time. A half hour a month and we would make a major difference. I would contend we all have a half hour a month where we could write or call our representatives.

Let me cite two examples of where small business became proactive.

1. Repeal of the Affordable Care Act of the requirement to provide 1099s for all independent contractors. Small businesses rose up and got this repealed.

2. In SF a gross receipts tax was put on the ballot. This was supported by the Mayor , almost all the Supervisors, Labor, Nonprofits and a very large number of big businesses. The only opposition was small business.

Small business got involved and talked to their employees. They talked to their customers and they talked to their friends. We were outspent about 5 to 1. On election day small business won getting 55% of the vote.

You can make a difference and if you really want to change the business climate for small business you have to get involved.

Start by making sure you vote today if you haven’t already done so.

Scott Hauge


Small Business California

2311 Taraval Street

San Francisco, CA 94116


Friday, November 02, 2012

Small Business Health Insurance/ Small Business Development Centers/Social Media

There was an article in the LA Times yesterday saying that a report done by the Commonwealth Fund found that 49% of small business workers were offered health insurance by their employers. This was down from 58% in 2003. Small business in this report was define as under 100 employees

It also said that health premiums had gone up 154% over the last decade.

Think there may be a correlation here.

I am pleased to report that we now have 15 Associations supporting the Small Business Development Centers around the state. I am meeting with a major financial institution mid month and plan to bring the support letters to the meeting. I am looking for Associations and small businesses to sign on to the support letter. Let me know if you would agree to sign on.

We hear a lot about Social Media, What social Media Outlets do you use? Which are most effective? Do you get much business from it? Any hints on how small businesses can most effectively use Social Media? What is best training source you have found to help you develop a social media presence

If you are interested in the results of this survey let me know and after I tabulate them I will send them to you.

Scott Hauge


Small Business California

2311 Taraval Street

San Francisco, CA 94116


Thursday, November 01, 2012

Exchange/Support California Small Business Development Centers

Yesterday the Exchange Board voted to allow employers to select one tier of coverage[bronze,silver,gold and platinum]] and employees get to select any carrier within that tier. This is required by the Affordable Care Act. California could however go beyond that. The other options which have been discussed are

Employers choose two insurers and two tiers and employees pick from the offered health plans and tiers

Employers choose the health plan and employees choose the level of coverage of coverage they want.

It was the Exchange board’s decision to go with the most simple plan at this time as they believe it delivers the best balance of employee choice and affordability.

Yesterday I asked for people to support additional funding of the Small Business Development Centers. Small Business California is going to develop a strategy to do this either by getting additional funds from the private sector and/or from the state. We are looking for support from individual businesses and associations.

Please see email I received from someone at an SBDC office.

Scott, I am not sure if you will read this e-mail or not (with all you do you must be busier than anybody else). With this e-mail, you have made me feel more encouraged to continue working for the SBDC at a moment where most of us are very pessimistic of the future of the SBDC. I am sure that with your support, credibility and reputation, more prospective funders will approach us. THANKS AGAIN. I will share this with our consultants team (I am the only staff left for now).

Please let me know if you will help us in our efforts

Scott Hauge


Small Business California

2311 Taraval Street

San Francisco, CA 94116